Akron, Ohio – Goodyear Tire & Rubber Co. plans to close its passenger car and light truck tire plant in Philippsburg, Germany with the loss of 890 jobs, the US company said in a stock exchange filing.
The closure of the facility, operated by Goodyear Dunlop Tires Germany GmbH, is part of a strategy to reduce excess capacity in “declining, less profitable segments of the tire market,” said the 20 Oct statement.
“Our strategy is focused on increasing Goodyear’s presence in high value segments of the tire market that are growing at rates above the total industry,” said Jean-Claude Kihn, president of Goodyear’s Europe, Middle East and Africa region.
Goodyear customers, he noted, want more premium tires with large rim diameters 17 inches and above.
These tires, according to Kihn, are in high demand by original equipment customers today and will be needed in the replacement market in the years to come.
In order to meet the increasing demand for large rim diameter tires, Goodyear said it would continue to make "substantial investments" to develop and deliver products while reducing excess capacity "in declining, less profitable segments of the tire market."
The tire maker aims to “substantially complete” the rationalisation by the end of 2017, at a pre-tax cost of between $240 million (€221 million) and $280 million – just under half to show up in this year’s figures, the remainder in 2017.
Goodyear expects a payback from the closure of around $20 million in higher operating income in 2018, and $30 million a year after that.