Goodyear moves German plant closing to July
Goodyear is planning to cease tire production at its 50-year-old plant in Philippsburg by July 31, five months earlier than had been announced previously.
The earlier closing date is in line with an agreement reached recently by Goodyear Dunlop Tires and the relevant employee labor representatives from the Industriegewerkschaft Bergbau, Chemie, Energie (BCE), according to Goodyear.
According to that agreement, employees will retain all elements included in the social plan that was agreed with the employee representatives last month.
The closing affects approximately 890 hourly employees at the passenger and light truck tire plant. Goodyear announced the closing last October along with plans to invest nearly $800 million through 2019 to boost production capacity for high-value-added tires.
The Philippsburg plant is one of six factories Goodyear operates in Germany, all of which have passenger tire capacity.
At that time, Goodyear said it expected pre-tax costs associated with the closing to be $240 million to $280 million, but once completed the action will improve Europe, Middle East and Africa's segment operating income by approximately $20 million in 2018 and $30 million on an annualized basis thereafter.
Goodyear said then it expected $165 million to $190 million of the closing costs to be cash charges, primarily for associate-related and other exit costs. It anticipated $75 million to $90 million to be non-cash charges related to accelerated depreciation and other asset-related charges.
Goodyear said its approach in reaching an agreement with the Philippsburg workforce was to meet the needs of individual employees and focus on finding "future-oriented solutions" for them.
In line with this approach — in addition to a fair severance payment — Goodyear said it will work with a transfer company specialized in helping employees develop individually tailored solutions that facilitate their move into new employment.
Goodyear said a "significant and growing number" of employees already have enrolled for training opportunities that will commence during late summer.
Goodyear did not say what effect the closing might have on an adjoining warehouse distribution center.