Goodyear Warns Thai Aircraft Tire Plant Won't Fully Reopen Until May

Goodyear Tire & Rubber Co. (GT) said Wednesday that a flood-hit aircraft tire plant in Thailand wouldn't resume full production until May, creating a potential shortage for commercial airline customers early next year.

The company is the world's largest producer of tires for commercial and military jets, as well as smaller planes, and is working to boost production at plants in the U.S. and the Netherlands to prevent bottlenecks it warned could emerge in February or March next year.

Tire shortages have been a problem in recent years for other big-ticket equipment such as the heavy machinery produced by Caterpillar Inc. (CAT), and the problems in Thailand comes as airplane makers prepare for a big rise in production off the back of record order books. Some airline and leasing customers have recently expressed concern about shortages in other areas such as aircraft seats and galleys.

The Goodyear plant in Bangkok was hit by flooding in October, though the full extent of the damage didn't become apparent until late last month, and the company last week flagged the potential shortfall in tires as "an industrywide concern."

Airbus and Boeing Co. (BA), the world's largest aircraft makers, this week said they are monitoring the tire situation though didn't see any immediate impact on aircraft deliveries, and have expressed confidence in the ability of their wider supply chains to support higher production.

The Goodyear plant produces new tires and retreads--airlines typically retread tires five or six times--and the supply problems are particularly acute for bias or cross-ply types, the most-commonly used in the industry.

"We are doing everything we can to address the potential shortage," said a Goodyear spokesman on Wednesday, with full production at the Bangkok facility expected in May.

The company said it didn't foresee any "material" financial impact from the Thai closure following insurance payouts.

Goodyear said it is looking for other viable supply sources for its customers and is also asking other aviation-tire manufacturers to help mitigate the situation. Michelin and Bridgestone Corp. (5108.TO, BRDCY) are among the other big players in the sector.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; [e-mail]

--David Kesmodel and Daniel Michaels contributed to this article.