Goodyear divests farm tyre business

GOODYEAR Tire & Rubber Co. is exiting the farm tyre business in the Europe, Middle East and Africa or EMEA
region.

The company earlier announced that its Goodyear Dunlop Tires France subsidiary (GDTF) planned to discontinue consumer tyre production at one of its manufacturing facilities , Amiens North in France to cut
manufacturing costs and eventually close down the facility.

The plans are still to be discussed with the European Central Works Council, the firm’s employee representatives and other relevant bodies in the EMEA region.

In light of the above plans, the company has recorded US$74 million of charges in the fourth quarter of 2012, and currently estimate the total charges to reach least US$230 million, US$91 million of which have now been recorded. The remaining charges will be considered as costs incurred in future periods.

All these charges relate to future cash payments, primarily for employee severance. Non-cash charges for accelerated depreciation of around US$20 million are expected to be offset by non-cash pension curtailment gains. The actions would eliminate about six million units of high-cost physical capacity, although Goodyear currently produces around 1.3 million tyres per year at the Amiens North; and are expected to improve
EMEA operating income by US$75 million annually, as compared to 2012 results, after the closure. Completion of the plan has not yet been disclosed. (RJA)