The Goodyear Tire & Rubber Co. announced it would lay off 5,000 employees and freeze salaries as the company announced a net loss in the fourth quarter of 2008. Goodyear said it would also eliminate between 15 and 25 million units of additional manufacturing capacity worldwide over the next two years, reduce inventory levels by more than $500 million, and cut capital expenditures to between $700 million and $800 million.
In addition, Goodyear said it will launch more than 50 new tires globally in 2009 targeted to key segments. This includes the Assurance Fuel Max tire introduced earlier this month in North America, which will be original equipment on the Chevrolet Volt electric vehicle.
The company’s total fourth quarter sales were $4.1 billion, down from $5.2 billion in the fourth quarter of 2007, after a 19% reduction in tire volume. Goodyear had a net loss of $330 million in the fourth quarter of 2008, compared to a net gain of $52 million in the fourth quarter of 2007.
“Given lower industry demand, we are taking aggressive action, reducing tire production, cutting costs and adjusting investments to better match market conditions,” said Robert J. Keegan, Goodyear chairman & CEO. “Collectively, these actions address the new economic realities. We will remain flexible and are prepared to take additional actions if market conditions warrant. Our goal is to ensure Goodyear is positioned for success when tire markets recover.”