Goodyear closes Philippine tire plant
Closure part of company's production adjustments
The Goodyear Tire & Rubber Company today announced that it will close its tire plant in the Philippines as part of a strategy to address uncompetitive manufacturing capacity globally.
The action, which is expected to be completed by the end of the third quarter, will result in a reduction of approximately 500 of the company's 600 associates in the Philippines. The company's sales and marketing operations in the country are not affected.
The closure of the plant in Las Pinas will result in the reduction of nearly two million units of annual production capacity, which is part of Goodyear's strategy to remove 15 million to 25 million units of capacity over the next two years. Production will be transferred to lower-cost plants in the company's Asia-Pacific Region.
"Due to high costs compared to other plants in the region, tires produced in the Las Pinas plant are not competitive in the marketplace," said Pierre E. Cohade, president of Goodyear's Asia-Pacific Region.
"Goodyear is committed to its business in the Philippines as well as continuous product innovation, and intends to maintain its market leadership through aggressive marketing, excellent customer service and superior products," Cohade said. "This action will, in no way, disrupt our service to wholesale, retail and original equipment customers."
Goodyear, which has had a presence in the Philippines since 1919, opened the Las Pinas plant in 1956.
The company plans to record approximately $20 million in charges associated with the closure in the third quarter of 2009, principally for non-cash asset write offs.