AKRON, Ohio, July 17 /PRNewswire-FirstCall/ -- The Goodyear Tire & Rubber Company today announced that it will close its tire plant in the Philippines as part of a strategy to address uncompetitive manufacturing capacity globally.
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The action, which is expected to be completed by the end of the third quarter, will result in a reduction of approximately 500 of the company's 600 associates in the Philippines. The company's sales and marketing operations in the country are not affected.
The closure of the plant in Las Pinas will result in the reduction of nearly two million units of annual production capacity, which is part of Goodyear's strategy to remove 15 million to 25 million units of capacity over the next two years. Production will be transferred to lower-cost plants in the company's Asia-Pacific Region.
"Due to high costs compared to other plants in the region, tires produced in the Las Pinas plant are not competitive in the marketplace," said Pierre E. Cohade, president of Goodyear's Asia-Pacific Region.
"Goodyear is committed to its business in the Philippines as well as continuous product innovation, and intends to maintain its market leadership through aggressive marketing, excellent customer service and superior products," Cohade said. "This action will, in no way, disrupt our service to wholesale, retail and original equipment customers."
Goodyear, which has had a presence in the Philippines since 1919, opened the Las Pinas plant in 1956.
The company plans to record approximately $20 million in charges associated with the closure in the third quarter of 2009, principally for non-cash asset write offs.
Goodyear is one of the world's largest tire companies. It employs approximately 71,000 people and manufactures its products in more than 60 facilities in 25 countries around the world.
Certain information contained in this press release may constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. There are a variety of factors, many of which are beyond our control, which affect our operations, performance, business strategy and results and could cause our actual results and experience to differ materially from the assumptions, expectations and objectives expressed in any forward-looking statements. These factors include, but are not limited to: deteriorating economic conditions or an inability to access capital markets; our ability to realize anticipated savings and operational benefits from our cost reduction initiatives or to implement successfully other strategic initiatives; actions and initiatives taken by both current and potential competitors; pension plan funding obligations; increases in the prices paid for raw materials and energy; work stoppages, financial difficulties or supply disruptions at our suppliers or customers; a labor strike, work stoppage or other similar event; our failure to comply with a material covenant in our debt obligations; the adequacy of our capital expenditures; potential adverse consequences of litigation involving the company; as well as the effects of more general factors such as changes in general market, economic or political conditions or in legislation, regulation or public policy. Additional factors are discussed in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.
The Goodyear Tire & Rubber Co.
CONTACT: Media, Keith Price, +1-330-796-1863, Analysts, Pat Stobb,
+1-330-796-6704