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Goodyear Plans $500M American Tire Plant

Thu, 05/29/2014 - 2:15pm

NEW YORK (AP) -- Goodyear says it will spend $500 million to build a new tire plant that will produce about 6 million tires a year for Goodyear's North American and Latin America customers.

The company expects to decide on a location for the plant in early 2015 and said production should start in early 2017.

The Akron, Ohio, company also said it will reallocate $1.1 billion out of its cash flows from 2014 to 2016. It is raising its quarterly cash dividend to 6 cents from 5, and will add $350 million to its stock repurchase program.

That means the company has approved the repurchase of as much as $450 million in stock through the end of 2016. Goodyear Tire & Rubber Co. says it could further expand the buyback program based on its financial performance. The company also plans to spend another $400 million on debt reduction.

Early this year, Goodyear announced it had fully funded its hourly pension fund with a $1.15 billion cash payment, ending more than a decade of dealing with the issue. The company said it was able to do so because of its strong cash flow in 2013.

Shares of Goodyear fell 13 cents to $26.03 in afternoon trading.

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