Akron-based Goodyear Tire & Rubber Co. saw sales of its namesake product decline this year, as more low-end imported tires were available in the United States and elsewhere in the world.
While sales of consumer electric vehicle tires were up in China, sales of replacement tires for vehicles were down in the rest of the countries Goodyear operates in. CEO Mark Stewart said in an earnings call Thursday that the market was “saturated” with low-end imports.
While other manufacturers were discounting lower-end tires, Stewart said he was looking for “blank spaces” to fill on the higher end. The company is also seeking to enhance profitability on its low-margin products, he said.
A restructuring plan called Goodyear Forward is contributing to the company’s profitability. Goodyear made $80 million in the second three months of the year; Goodyear Forward contributed $90 million. For the same period a year ago, the company lost $208 million.
As part of the Goodyear Forward plan, the company announced it will lay off 175 employees in Akron early next year, moving those jobs to Costa Rica. Aside from saying the jobs supported Goodyear’s business and corporate functions, the company didn’t give any more details about the positions that were being eliminated.
Those positions are part of a larger layoff effort over the course of several years. Goodyear, which has about 2,600 Akron employees and 71,000 worldwide, has already laid off 50 of the about 750 employees whose job losses were announced this year.
The company also laid off about 900 employees this year in job reduction plans that were announced in previous years. And in the coming years, about 3,050 more jobs will be eliminated. Doug Grassian, a Goodyear spokesperson, said he could not say if any of those additional jobs are in Akron.
The company also announced last month that it would sell its off-the-road tire business to The Yokohama Rubber Co. for $905 million in cash. The deal has a $47.5 million termination fee if it doesn’t go through because of antitrust or other reasons.
The Goodyear Forward plan also includes a reduction in overtime hours of 15% and the sale of some property, Stewart said. He said moving quickly to recognize savings through the plan is “critical.”
“We are clearly progressing on our goals as part of the Goodyear Forward plan,” he said. “We’re already making good progress and continue to execute to achieve our goals.”