Goodyear To Close Philippines Tire Plant, Cut 500 Jobs There

   DOW JONES NEWSWIRES 
 

Goodyear Tire & Rubber Co. (GT) will close its tire plant in the Philippines and cut about 83% of its staff in the country as it continues to look for ways to cut costs amid weak demand and high costs at the facility.

The recession has slashed sales almost 30% as consumers and auto makers skipped purchases or cut orders. Goodyear, for its part, already has been doing some cost-cutting - in recent months, it has said it will cut production at various facilities, and it has shed more than 9,000 jobs since the middle of last year.

"Due to high costs compared to other plants in the region, tires produced in the Las Pinas plant are not competitive in the marketplace," said Pierre Cohade, president of the company's Asia-Pacific region. The facility opened in 1956.

The company said the closing will be completed by the end of the current quarter, and about 500 of the company's 600 employees in the Philippines will lose their jobs. It said sales and marketing operations in the country won't be affected.

The plant closure will result in the reduction of about 2 million units of annual capacity, part of Goodyear's plan to cut 15 million to 25 million units in the next two years. It said production would be moved to lower-cost plans in the Asia-Pacific region.

Goodyear said it likely will record about $20 million in charges related to the closing in the current quarter.

Shares closed Thursday at $12.61 and haven't traded premarket. The stock has more than doubled so far this year but is still off more than one-third in the last 12 months.

-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353; [e-mail]