Goodyear Slashes 1,100 Jobs, Closes Texas Plant

Goodyear Tire & Rubber Co. (GT) said on Monday that it plans to close a plant in Tyler, Texas, three weeks after workers at the plant and 15 others went on strike in part because of the tire maker's plan to shut down the factory.

The move will eliminate about 1,100 jobs and is part of Goodyear's strategy to end some of its private label tire business.

The plant, which opened in 1962, has produced approximately 25,000 passenger and light truck tires per day.

More than 12,000 United Steelworkers members in Tyler and elsewhere in North America went on strike Oct. 5 after months of talks with the world's third biggest tire maker. No new talks have been scheduled.

A message left with the union Monday seeking comment on the plant closing was not immediately returned.

Akron-based Goodyear has said the union refused to agree to help it remain competitive in a global economy. The union said the company's last proposal would have included two plant closings — the union says the other is in Gadsden, Ala. — and other concessions.

Goodyear said in June that it wanted to leave parts of the private label tire business and that the decision would mean a reduction in capacity. Goodyear previously announced to investors an aggressive strategy to reduce costs by more than $1 billion by 2008.

"We must take the steps necessary to reduce our costs and improve our competitive position," Jon Rich, president of North American Tire, said in a statement. "While this is an extremely difficult decision for everyone involved, it was required to help turn around our North American business."

He did not say when the plant will close.

The Tyler plant mostly makes small passenger vehicle tires, a segment that has been under considerable pressure from low cost imports.

Officials in Tyler, a city of about 84,000 people 100 miles northwest of Dallas, have been fearful of losing one of the area's largest employers. The city recently presented Goodyear with a $12 million incentive plan to keep the plant running.

Goodyear expects annual savings of approximately $50 million after taxes, and the closing will result in a restructuring charge of between $155 million and $165 million. The cash portion of these charges is estimated to be between $40 million and $50 million.

Goodyear shares fell 20 cents to $14.76 in early trading Monday morning on the New York Stock Exchange. Shares have been trading between $9.75 and $19.31 over the last year.