Goodyear to upgrade plants in Germany; laying off 1,000 jobs

March 21, 2019

American Goodyear Tire & Rubber Co. has approved of plans to upgrade and automate two of its tyre manufacturing facilities in Hanau and Fulda, Germany, to increase production of premium tyres 17 inches in diameter and larger.

The plan was disclosed recently and involves Goodyear Dunlop Tires Germany but will result in the loss of around 1,100 jobs at the two factories due to new equipment and modernisation – part of Goodyear’s market strategy to strengthen the competitiveness of its manufacturing footprint.

Goodyear expects that changes to the layout of the plants and new more modern equipment will be more efficient, resulting in the need for fewer employees, but the plan remains subject to consultation with relevant employee representative bodies.

The modernisation work is expected to complete in 2022 – with pre-tax charges estimated to be at least US$135 million, of which approximately US$125 million is expected to be cash charges primarily for associate-related costs, plus US$10 million for non-cash charges related to asset write-offs and accelerated depreciation. Goodyear will record about US$90 million of those charges in the first quarter of 2019, and make cash payments of US$30 million and US$40 million in 2020 and 2021 respectively.

Jürgen Titz, CEO of Goodyear Dunlop Tires Germany has said: “We are constantly working to meet the rapidly changing needs of our customers.These actions are expected to increase the productivity of both plants upon completion and the conversion savings are then  expected to improve Europe, Middle East and Africa’s segment operating income by US$60 million-US$70 million on an annualized basis over a three-year period.”

Goodyear Dunlop Tires Germany currently employs 1,300 workers in Hanau and 1,500 workers in Fulda per hour, and together rate at 21,000 consumer tyres a day. The Hanau plant has been operated by Goodyear since the start of its global alliance with Sumitomo Rubber Industries in 1999, while the Fulda plant was acquired from Gummiwerke Fulda in 1966.

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