Goodyear to close tire plant in Texas, eliminating 1,100 jobs

Monday, October 30th 2006, 2:26 pm
By: News On 6

AKRON, Ohio (AP) _ Goodyear Tire & Rubber Co. said on Monday that it plans to close a plant in Tyler, Texas, three weeks after workers at the plant and 15 others went on strike in part because of the tire maker's plan to shut down the factory.

The move will eliminate about 1,100 jobs and is part of Goodyear's strategy to end some of its private label tire business.

The plant, which opened in 1962, has produced approximately 25,000 passenger and light truck tires per day.

More than 12,000 United Steelworkers members in Tyler and elsewhere in North America went on strike Oct. 5 after months of talks with the world's third biggest tire maker. No new talks have been scheduled.

The United Steelworkers, which represents Goodyear workers, said the announcement to close the Tyler plant was a slap in the face, particularly because the union took pay cuts, job losses and other concessions in 2000 to help get the company back on track financially.

``Now they seem committed to stripping away health care benefits from those who made the turnaround possible and to further close plants and abandon the business,'' said Tom Conway, USW vice president and chairman of the Goodyear negotiating team. ``Their foolishness is outweighed only by their greed.''

Goodyear has said the union refused to agree to help it remain competitive in a global economy. The union said the company's last proposal would have included two plant closings _ the union says the other is in Gadsden, Ala. _ and other concessions.

Goodyear said in June that it wanted to leave parts of the private label tire business and that the decision would mean a reduction in capacity. The company refused to name specific plants.

Goodyear previously announced to investors an aggressive strategy to reduce costs by more than $1 billion by 2008.

``We must take the steps necessary to reduce our costs and improve our competitive position,'' Jon Rich, president of North American Tire, said in a statement. ``While this is an extremely difficult decision for everyone involved, it was required to help turn around our North American business.''

He did not say when the plant will close.

At the company's headquarters in Akron, where union members have been keeping around-the-clock picket lines, strikers huddled around barrel fires for warmth said they were saddened by the closing announcement but not surprised.

``If they're closing that plant I'm sorry to hear it. You don't want to lose any jobs,'' said Frank Parravani, a 39-year employee who stood near about a dozen headstones made out of wood with the names of Goodyear plants on them, including Tyler, Gadsden and others.

The Tyler plant mostly makes small passenger tires, a segment that has been under considerable pressure from low cost imports.

Officials in Tyler, a city of about 84,000 people 100 miles east of Dallas, have been afraid of losing one of the area's largest employers. The city recently presented Goodyear with a $12 million incentive plan to keep the plant running.

Goodyear expects the Tyler closing to save it approximately $50 million a year after taxes. The closing will result in a restructuring charge of between $155 million and $165 million, with the cash portion of the charges estimated to be between $40 million and $50 million, the company said.

Goodyear shares rose 6 cents to $15.02 in midday trading Monday on the New York Stock Exchange. Shares have been trading between $9.75 and $19.31 over the last year.