Goodyear Tire & Rubber Co. recently reported its fourth quarter and full-year 2010 financial results, as well as announcing it plans to close its Union City, Tenn., plant.
The tiremaker saw a net loss of $177 million in the fourth quarter of 2010, compared with net income of $107 million in the 2009 quarter. Fourth quarter 2010 sales were $5.1 billion, up 14% from the 2009 quarter. Tire unit volumes totaled 45 million, up 4% from 2009.
Full-year results saw Goodyear’s annual sales for 2010 up 16% to $18.8 billion, compared to $16.3 billion in 2009. The company’s 2010 net loss of $216 million compares to a net loss of $375 million in 2009.
“I’m very pleased with Goodyear’s performance in the fourth quarter and the full year of 2010. Our operating results reflect significant recovery, with improvement across all of our businesses versus last year despite escalating raw material costs,” said Rich Kramer, chairman and CEO. “Our selective approach to the business continues to present strong profit growth opportunities. Goodyear’s leading brands and technology offer customers in targeted segments with an outstanding value proposition.”
He added, “We also remain firmly committed to improving our competitiveness and, as a result, have announced plans to close our Union City, Tenn. plant.”
The company said it will close the manufacturing facility by the end of 2011 as part of its strategy to reduce high-cost manufacturing capacity globally and provide cost-effective, high-value-added products.
“While we are committed to manufacturing in North America, all of our plants must be cost competitive and be able to demonstrate sustainable world-class productivity. That is not the case with this plant, and as a result, the market has moved beyond what the factory is able to build,” said Kramer.
This closure, when complete, will eliminate approximately 12 million units of available capacity and is the final action in plans announced in 2009 to eliminate 15 million to 25 million units of high-cost capacity globally. This action is expected to provide annual cost savings of approximately $80 million, according to Goodyear.
The Union City plant currently employs approximately 1,900 workers.
