Goodyear spending $1B on 'high value-added' capacities

ERJ staff report (TB)

New York -- Goodyear is spending more than $1 billion through 2013 to add 19 million units of “high value-added” (HVA) consumer tyre capacity at plants in the US, Brazil, Chile and Germany, CFO Darren Wells told a group of financial analysts this morning in New York.

Among the investments are projects at the firm's Lawton, Okla., and Fayetteville, N.C,. factories, Mr. Wells said, including $150 million at Lawton to expand the plant by 200,000 square feet of space and convert 5 million units of annual capacity for low value-added tyres to higher value-added products.

The non-union Lawton plant is rated at 66,000 units a day. Goodyear previously had not disclosed the value of the project at Lawton.

At Fayetteville, Goodyear is spending $75 million over five years to convert 3 million units of capacity to HVA output. The plant there is rated at 56,000 units daily.

Goodyear did not say what impact, if any, these projects will have on the plants' employment levels.

The largest of the projects is at the company's Santiago, Chile, plant, where Goodyear is spending $500 million over five years to modernise the 33-year-old factory and convert 7 million units of annual capacity to HVA capacity, Mr. Wells said.

That plant, which is rated at 17,000 units a day with 500 employees, will serve both the domestic and export markets throughout the Americas.

In Brazil Goodyear is spending $200 million over the next two years to convert 2 million units of annual capacity at the firm's Americana plant to HVA output. That plant is rated at 35,000 units a day with 2,000 workers.

In Germany, Goodyear has budgeted $100 million through 2013 to convert 2 million units of annual consumer tyre capacity at its Pneumant Reifen & Gummi Werke GmbH factory in Riesa to HVA output. The plant, which Goodyear acquired in its 1999 purchase of Sumitomo Rubber Industries Ltd.'s European and American assets, is rated at 12,000 units a day.

Goodyear describes consumer HVA tyres as those with one or more of the following features:

• Rim diameter of 17 inches or greater;
• Reduced sidewall height;
• Speed rating of H or higher;
• Made with segmented moulds;
• Use advanced tread compounds; and
• Incorporate extra load constructions.

HVA commercial tyres are those with specific performance characteristics and retreadability.

When these projects are concluded in 2013, Mr. Wells said, Goodyear expects 77 percent of its global tyre output of 195 million tyres will be considered HVA products.

From Tire Business (A Crain publication)

Press release from Goodyear