A world leader in tire and engineered rubber component manufacturing, Goodyear operates in a very competitive and globalized marketplace. Yesterday, as part of an ongoing strategy to reduce excess high-cost capacity, the company announced that its plant in Valleyfield, Quebec will no longer manufacture tire products. The facility is expected to transform into a materials mixing plant by the early summer.
The tire manufacturing facility currently employs about 1000 people, though once its transformation is complete it's only expected to employ about 200.
"In today's intensely competitive and increasingly global business environment, we face some very difficult choices," said Jon Rich, president of Goodyear North America. "The decision to discontinue tire production at Valleyfield is one of those necessary steps to make Goodyear more competitive. This decision does not reflect on the commitment or performance of our Valleyfield associates."
The move reduces Goodyear's excess high-cost manufacturing capacity by an additional 7 million units- bringing total reductions as part of their four-point cost saving plan to 21 million units and exceeding original targets for 2008.
The transformation is expected to save the company about $40 million per year, though it comes at a cost. Goodyear is likely to incur charges totaling as much as $120 million for restructuring and accelerated depreciation.
With the soon to be transformed Valleyfield facility joining some five other plants slated for closure around the globe, total annual cost savings are estimated at $125 million.
Goodyear employs about 80,000 people worldwide.
The tire manufacturing facility currently employs about 1000 people, though once its transformation is complete it's only expected to employ about 200.
"In today's intensely competitive and increasingly global business environment, we face some very difficult choices," said Jon Rich, president of Goodyear North America. "The decision to discontinue tire production at Valleyfield is one of those necessary steps to make Goodyear more competitive. This decision does not reflect on the commitment or performance of our Valleyfield associates."
The move reduces Goodyear's excess high-cost manufacturing capacity by an additional 7 million units- bringing total reductions as part of their four-point cost saving plan to 21 million units and exceeding original targets for 2008.
The transformation is expected to save the company about $40 million per year, though it comes at a cost. Goodyear is likely to incur charges totaling as much as $120 million for restructuring and accelerated depreciation.
With the soon to be transformed Valleyfield facility joining some five other plants slated for closure around the globe, total annual cost savings are estimated at $125 million.
Goodyear employs about 80,000 people worldwide.