EMEA costs-spike a trigger for Goodyear restructuring
20 Nov 2023
Closures of tire plants in Fulda and Furstenwalde will leave a major dent in US group's operations in Europe
London – With the planned closures of its plants in Fulda and Furstenwalde, Goodyear will cut its employment and production – of passenger car, light truck and truck & bus tires – in Germany by around 35-40% (see table).
The sharp rise in energy and other production costs in Europe since 2021 appears a major factor in the closures decision – and a trigger, perhaps, for wider recent developments at the US group.
For 2022, Goodyear EMEA reported 74.5% year-on-year decline in operating income, to $61 million, on net sales of about $5,645 million.
The decline, which was linked largely to higher conversion and logistics costs – of $217 million and $61 million respectively – reduced Goodyear’s operating margin in EMEA to just 1.1%.
By contrast, the group’s operating margin in Americas was 8.6% on net 2022 sales of $12,766 million, while the equivalent figures in Asia Pacific came in at 5.1% on net sales of $2,394 million.
Full-year 2023 is not looking any better for Goodyear EMEA: segment operating income collapsed to $11 million over the first nine months – from $141 million in the same period of 2022 – on sales about level at $4,207 million.
Nevertheless, EMEA remains an important market for Goodyear: with tire unit sales of 55 million in 2022, the region represented around 30% of its sales worldwide – compared to Americas, 51%; and Asia Pacific, 19%.
As well as its current German locations, Goodyear EMEA operates tire manufacturing plants at: Amiens and Montlucon in France; Colmar-Berg and Dudelange, Luxemburg; Debica, Poland; Krusevac, Serbia; and Kranj, Slovenia; Adapazari and Izmit, Turkey; and Uitenhage, South Africa.
Goodyear tire manufacturing operations in Germany
Truck & bus
Truck & bus
Car, LT, truck & bus
*Goodyear put total number of jobs impacted by both tire plant closures combined at 1750.