Goodyear expects $40m sales drop after fire at Polish tire plant

Akron, Ohio – Goodyear Tire & Rubber expects its consumer sales in Europe, Middle East and Africa (EMEA) to be impacted by up to $40 million (€38 milion) in the second half of the year due to a fire at its production facility in Debica, Poland.

The fire broke out on 20 Aug and the plant resumed production at nearly 55% of capacity two days later, said Goodyear in an 8-K filing 28 Sept (ERJ report).

The factory is currently operating at 70% capacity but a full ramp-up is not expected until the fourth quarter of 2024.

This, said the Goodyear statement, is due to the lead time to replace damaged equipment,.

As a result, Goodyear said the EMEA consumer sales are expected to be negatively impacted by $20-$25 million in the third quarter of 2023 and $10-$15 million in the fourth quarter of the year.

The tire maker also expects operating income to be hit by the related lost sales margin as well as unabsorbed fixed costs and other period expenses.

This, it said, is anticipated to be between $10-$15 million in both the third and fourth quarters of 2023.

The Akron-based group said it will provide an estimated impact to 2024 after confirming the restoration schedule.

Goodyear also added that it is mitigating the impact on its customers by using existing inventory and increasing production at other facilities.

The measures, it said, should help to offset lost production until Debica returns to full production.

Goodyear said it has third-party insurance with a $15 million per occurrence deductible that covers property damage, cleanup expenses and qualifying business interruption impacts.

The tire maker expects that “a significant portion” of the business interruption impacts to be reimbursed by insurance.