The Goodyear Tire & Rubber Co. said this week it expects to cut 1,100 jobs at two of its Dunlop tire plants in Germany as part of a plan to modernize tire manufacturing facilities and curtail production.
The decision to curtail the production of less profitable tire segments led to the job cuts, according to MarketWatch. After the announcement, Goodyear’s stock rose 1.7% in morning trade. The Akron, Ohio-based tiremaker said it expects to record charges of $135 million with $90 million recorded in the first quarter of 2019 as a result of the facility rationalization plan, which is expected to be completed during 2022.
The facilities in the plan are the Dunlop Tires Germany GMbH facilities in Hanau and Fulda. The company is planning for changes to the layout of the plants as well as efficiency gains from new equipment. The upgrades are meant to improve Goodyear’s competitiveness and increase production of premium consumer tires that are 17 in. and larger in diameter, the Akron Beacon Journal reported.
Goodyear said the changes are expected to boost operating income for its Europe, Middle East and Africa business by an annualized $60 million to $70 million over a three-year period beginning in 2020, MarketWatch reported.
In 2017, Goodyear closed its Philippsburg, Germany, Dunlop tire plant, where 890 people worked, The Beacon Journal reported.