Goodyear to cut 200 jobs in Europe to optimise operations

Akron, Ohio — Goodyear Tire & Rubber is planning to further streamline its European operations, with plans to reduce staffing levels by about 200 positions, subject to required consultations.

In its fourth quarter report, published 8 Feb, the US tire maker said the move is part of a previously announced wider group restructuring, which in total will see a 5% reduction of the global workforce to cut costs by $15 million (€14 million) per quarter.

Goodyear expects to see the benefits of the actions over the course of the second and third quarter of this year.

At the same time, Goodyear said it is carrying out a “business transformation” initiative across its Europe, Middle East and Africa (EMEA) operations to identify opportunities and update specific work processes.

“We are also conducting a review of our EMEA manufacturing footprint to identify additional actions that will improve our cost position and prepare for future technology demands,” it added.

The announcement came in the wake of weak results delivered by Goodyear’s EMEA operations, particularly in the final quarter of 2022.

Over the three-month period, the unit reported an $80 million segment operating loss, down from an operating profit of $41 million reported last year

Sales for the quarter fell 1.5% to $1.4 billion, reflecting a 7.3% lower unit volumes and a 20% impact of currency devaluation, partly offset by a 28% increase in revenue per tire.

The tire maker linked the operating loss to the impact of higher raw material costs of $252 million and inflation and other cost increase of $118 million, including a $50 million rise in energy bills.

These costs, Goodyear said, more than offset the $264 million positive impact of price/mix.

This marks a significant reversal for Goodyear’s EMEA business, which had reported positive operating income since the second quarter of 2020.

For the short-term outlook, the tire maker said it expected the segment operating income (SOI) of the EMEA business to improve during 2023.

"As pricing continues to catch up to the impact of higher costs.... our goal is for EMEA to approach breakeven SOI for the first quarter and return to recent historical run-rates by the middle of the year," it said.

Group-wide, Goodyear reported a 6% growth in net sales to $5.37 billion over the final quarter of the year.

The stronger US dollar, said the company, reduced sales by nearly 7%.

The Akron-based tire maker noted an overall 3% decline in volumes in the final quarter of the year to 47.2 million units.

Goodyear reported a net loss of $104 million during the quarter, down from $553 million of income registered the year before.

Segment operating income came in at $236 million, down just under 40% compared to the final quarter of 2021.

Here, Goodyear said the $722 million impact of price/mix more than offset the $550 million increase in the cost of raw materials.