Goodyear Tire (GT) to close its Melksham, United Kingdom tire manufacturing facility

October 19, 2022 4:33 PM EDT

Goodyear Tire (NASDAQ: GT) disclosed:

On October 13, 2022, The Goodyear Tire & Rubber Company (the “Company”) approved a plan that proposes to close its Melksham, United Kingdom tire manufacturing facility, which was acquired in conjunction with the merger between the Company and Cooper Tire & Rubber Company (“Cooper Tire”). The proposed plan is intended to address long-standing competitiveness issues at the Melksham facility. The proposed plan would also (i) consolidate the Company’s premium motorcycle tire production in Europe into a single center of excellence based in the Company’s Montlucon, France tire manufacturing facility, (ii) discontinue Cooper Tire’s European motorsport program and (iii) transfer light truck tire production from the Montlucon facility to other tire manufacturing facilities in Europe. The proposed plan would include approximately 320 job reductions at the Melksham tire manufacturing facility. The plan remains subject to consultation with relevant employee representative bodies.

The Company expects to substantially complete this rationalization plan by the end of 2023 and estimates total pre-tax charges associated with this action to be between $80 million and $90 million, of which $60 million to $70 million is expected to be cash charges primarily for associate-related and other exit costs, with the remainder representing non-cash charges primarily for accelerated depreciation and other asset-related charges. The Company recorded $32 million of pre-tax charges in the third quarter of 2022 and expects to record an additional approximately $10 million of pre-tax charges in the fourth quarter of 2022 related to this plan. The majority of the remaining charges will be recorded in 2023. A majority of the cash outflows associated with this plan will occur in 2023.

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