Goodyear To Eliminate 7,200 Jobs
Wednesday, February 14th 2001, 12:00 am
By: News On 6
AKRON, Ohio (AP) â€” Goodyear Tire & Rubber Co., suffering from higher costs and lower tire demand from U.S. automakers, plans to eliminate 7,200 jobs, or 6.8 percent of its worldwide work force, this year.
The plans were disclosed Wednesday as Goodyear said it lost $102 million in the fourth quarter of last year.
Samir G. Gibara, chairman and chief executive officer of the tire maker, said the cuts would be on top of the elimination of 3,500 jobs last year, boosting the total two-year reduction to 10,700 positions, or about 10 percent of Goodyear's work force of 105,000.
Goodyear expects savings this year of $150 million from the cuts, and annual savings of about $250 million a year beginning in 2002, Gibara said.
Spokesman Keith Price said the latest cuts will occur around the world and will include layoffs, attrition and retirements. No breakdown has been decided, he said.
The tire maker's loss in the fourth-quarter amounted to 65 cents per share on sales of $3.5 billion, compared with fourth-quarter 1999 earnings of $37 million, or 23 cents per share, on sales of $3.6 billion.
Goodyear's latest quarterly results include $93.7 million in charges as part of its plan to trim its work force.
Without extraordinary items, the company posted a loss from operations of $16.5 million, or 11 cents a share. That was a smaller loss than the 16 cents a share expected by analysts surveyed by First Call/Thomson Financial.
In midday trading on the New York Stock Exchange, Goodyear shares were up 2 cent at $24.
``The severe decline in original equipment demand for tires and engineered products in North America and the very soft winter tire market in Europe had a substantial impact on our fourth-quarter results,'' Gibara said.
``Unrelenting high costs for raw materials, especially for oil-derived products, continued to depress our results. Additionally, the euro's value versus the U.S. dollar was a negative factor throughout the quarter,'' Gibara said.
Goodyear shipped 55.7 million tires in the fourth quarter, up 1 million, or 1.8 percent, from a year ago.
For the year, Goodyear earned $40.3 million, or 26 cents a share, on record sales of $14.4 billion, compared with 1999 profits of $243.2 million, or $1.55 per share, on sales of $13.3 billion.
It shipped 223.3 million tires for the year, up 22.8 million or 11.4 percent.
Steve Girsky, an analyst with Morgan Stanley Dean Witter & Co., said the cuts showed the company was ``continuing to attack their cost structure, which is important in an extremely competitive business.''
He said the outlook hinges on Goodyear's ability to increase its market share and maintain price increases.
On the Net:
Goodyear site: http://www.goodyear.com