Goodyear Tire & Rubber Co. announced Friday a proposal to close a tire plant in New Zealand as part of its strategy to reduce high-cost manufacturing capacity globally.
Manufacturing in New Zealand has experienced greater pressure than in many other markets due to high costs, competition from low-cost imports and the lack of domestic auto production.
The proposed closure is expected to be completed within six to eight months and create annual cost savings of about $15 million in Goodyear's Asia Pacific region, the company said. It would result in restructuring charges of approximately $35 million, of which approximately $20 million is expected to be cash charges.
"A key component of our strategy is the elimination of high-cost tire manufacturing capacity," said Goodyear Chairman and Chief Executive Officer Robert J. Keegan. "Our objective is to take actions over the next three years that will result in annual savings of between $100 million and $150 million."
The company's South Pacific Tyres (SPT) business has initiated consultation with associates and union representatives regarding the proposal to close the plant in Upper Hutt, New Zealand. The plant, which has about 400 associates, produces about two million radial passenger car tires per year.
Goodyear and SPT would supply customers with product produced in other countries in the Asia Pacific region, according to SPT Chief Executive Officer Joseph Copeland.