Akron, Ohio - Goodyear plans to slash as much as $2000 million in annual costs by 2009, doubling the original estimate of cost cuts originally laid out in 2005.
Chairman and chief executive Robert Keegan said in the tyre maker's first-quarter earnings statement that the firm is targeting a savings goal of $1800 million to $2000 million by 2009.
Two years ago, Goodyear planned to cut between $750 million and $1000 million in costs by 2008. In 2006 the firm revised that figure, targeting more than $1000 million.
The new target of up to $2000 million includes the previously announced target, as well as $300 million from the labour contract signed with the United Steelworkers and increased savings in its four categories, including continuous improvement such as Six Sigma and lean manufacturing, reductions in GoodyearÂ´s manufacturing footprint, selling, administrative and general expenses, and increased Asian sourcing.
Keegan said the tyre maker plans "significant investments" in both its production of high-value-added tyres and its low-cost manufacturing capacity, which will make up half of the firm's total capacity within five years.
Goodyear said it plans to increase production capacity for value-added tyres by 40 percent over the next five years. The firm also plans to increase its production in low-cost countries by one-third to support growth in emerging markets.
From Rubber & Plastics News (A Crain publication)
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