Goodyear Initiates Cost Reduction Actions, Including Intent to Close UK Tire Factory

AKRON, Ohio, April 5 - The Goodyear Tire & Rubber Company today said it intends to close a high-cost tire plant in the United Kingdom as part of its strategy to reduce costs in its worldwide operations.

The company has initiated a process to close its Goodyear Dunlop Tyres UK passenger tire factory in Washington, where it has begun consultation with union representatives. This action is expected to create annual savings of approximately $20 million and result in charges of between $75 million and $85 million ($55 million to $65 million after-tax). The cash portion of this charge is estimated to be $35 million to $40 million.

In addition, Goodyear will cease production of bicycle tires and inner tubes at its Debica, Poland, facility. Cost reduction actions in logistics, retail and administration will be taken in the company's European Union, Asia Pacific and Engineered Products business units.

In total, the actions are expected to eliminate about 1,500 positions, create annual savings of between $40 million and $50 million ($30 million to $40 million after tax) and result in a charge of between $105 million and $115 million ($75 million to $85 million after tax).

Of the total charge, approximately $55 million ($40 million after-tax) will be recognized in the first and second quarters of 2006. The cash portion of these charges is estimated to be between $60 million and $65 million.

source : Goodyear

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