Goodyear to Close Plants in England and Poland

The largest tiremaker in the U.S. will cease operations in two European plants in an effort to offset losses and to compete with competitors that have moved to lower-cost countires.

U.S. tiremaker Goodyear Tire & Rubber Co. said it will close factories and cut 1,500 jobs in the U.K. and Poland to help cut losses as competitors switch to lower-cost countries, Bloomberg reported.

According to the report, Goodyear will shut a car-tire plant in Washington, England, and cease bicycle-tire and inner-tube production in Debica, Poland, saving $50 million annually. Closure costs may total $115 million, the company said.

The move follows Goodyear's announcement that it had losses of $51 million in the fourth quarter of 2005. The company said it is slashing European output because carmakers, including General Motors Corp. and Volkswagen AG, push suppliers to cut costs in an increasingly competitive market. Continental AG, Germany's biggest tiremaker, has moved production to countries such as Romania and Goodyear has said it may switch to China.

Goodyear expects the plant closing in England to save approximately $20 million annually, resulting in charges of as much as $85 million, or $65 million after tax. A Brussels-based spokesman for the company told Bloomberg that the factory, which has capacity for 3.3 million tires a year, has struggled to control costs and that some output may be switched to Germany, where the company has good relations with labor unions.

Capacity at the Polish bicycle-tire plant will be eliminated. The company cites the fact that production at the plant is no longer competitive.

More in Labor