Goodyear to close its Australian tire plant by the end of the year

In an effort to cut costs and provide high-value-added manufacturing capacity globally, the Goodyear Tire & Rubber Company has announced plans to close its Australian manufacturing facility. This action will eliminate approximately 3 million units of high-cost capacity and provide Goodyear with annual cost savings of approximately $35 million.

"This completes our commitment to reduce high-cost capacity by about 25 million units and achieve annual cost savings of more than $150 million," says Robert J. Keegan, Goodyear's chairman and chief executive officer. "Going forward, our efforts will be focused on increasing production of high-value-added tires in low-cost operations to support growth in these segments in Asia-Pacific markets, including Australia and New Zealand."

South Pacific Tyres (SPT) will immediately initiate communications with its 600 associates and union representatives regarding the plan to close the plant in Somerton, Victoria by Dec. 31, 2008

"Goodyear and South Pacific Tyres remain committed to their customers and a strong and ongoing product, retail and wholesale presence in Australia," said SPT Chief Executive Officer Judith Swales, in a statement issued for the media.

Total restructuring and accelerated depreciation charges for this action are estimated to be approximately $125 million after tax, of which approximately $85 million is for cash charges. Goodyear anticipates recording charges of approximately $75 million after tax in the second quarter of 2008.

Formed in 1987 as a joint venture, SPT has been wholly owned by Goodyear since 2006. The leading tire maker and marketer in Australia, it has more than 3,000 associates. Its results have been consolidated with those of Goodyear's Asia Pacific region since 2004.

For more information about Goodyear, at home or abroad, visit the company's Web site.