Goodyear Tire Cuts 3,500 Jobs

AKRON, Ohio – Goodyear Tire & Rubber Co. on Friday reported a fourth-quarter loss as economic weakness reduced tire demand, and said it would slash 3,500 more jobs worldwide to eliminate high cost tire capacity.

Costs related to the job cuts totaled about $125 million or 77 cents a share in the fourth quarter, the company said. Annualized savings from the cuts are expected to exceed $102 million.

Of the 3,500 jobs that will be eliminated by the end of 2002, some 2,200 are Goodyear workers and the balance are employees of the company's joint ventures, a company spokesman said.

The Akron, Ohio-based tiremaker incurred a fourth quarter net loss, after items, of $174.0 million, or $1.07 a share, compared with a net loss of $102.0 million, or 65 cents, a year ago.

Goodyear reported a loss before items of $47.1 million, or 29 cents a share, compared with a year-earlier loss before items of $16.5 million, or 11 cents.

Sales fell to $3.47 billion from $3.53 billion.

Analysts had expected Goodyear to report a loss per share before items in a range of 20 cents to 32 cents, with the mean estimate a 28-cent loss, according to market research firm Thomson Financial/First Call.

The most recent quarter included a gain of $16.9 million, or 10 cents a share, from the sale of its specialty chemicals business.

Goodyear has warned automakers it may stop selling them certain tires at a loss, a shift that would boost the company's profits, according to a report in Friday's Wall St. Journal. Company officials are expected to comment on the report on a conference call with investors this morning.

Goodyear said it has reduced production to bring it in line with demand. It said the move resulted in about $320 million of unabsorbed costs during the year, including $150 million in the fourth quarter.

It also blamed depressed economic conditions and continued weak demand around the world.

The company said its sales last year were better than those of the industry as a whole.

"Led by our Goodyear brand, we gained market share around the world," said Chairman and Chief Executive Sam Gibara in a statement. "In North America, we added two points of market share."

For the 2001 year, Goodyear reported a net loss of $203.6 million or $1.27 per share, the company's first annual loss since 1992 when it took a $1 billion charge to cover an accounting change for medical benefits for retirees. The company last reported an operating loss in 1990.

Goodyear shares were down 34 cents, or 1.6 percent, at $21.06 in early trading on the New York Stock Exchange. The stock has fallen about 10 percent so far this year while the Standard & Poor's 500 index has declined about 5.9 percent.