Akron, OH-based Goodyear Tire & Rubber Co. is temporarily reducing production at its North American tire facilities due to shortages of raw materials resulting from damage caused by Hurricane Rita in Texas and Louisiana.
According to Christopher Clark, senior vp-global sourcing for Goodyear, tire production has been reduced by about 30% in response to supplier shortages, though he stressed production should increase rapidly as the raw material disruptions ease in the coming weeks.
“At our present production and inventory levels, we currently anticipate that we have the ability to meet our obligations,” Clark said. “However, because of the uncertainty around supplier shortages and transportation system difficulties associated with the hurricane, we’ve declared ‘force majeure’ under certain contracts.”
Goodyear is already assessing the priority product needs of its customer base so it can analyze how delivery schedules may be affected – though no deliveries to customers have been impacted to date, Clark pointed out.
The company added that its chemical facilities in Texas suspended operations in anticipation of the hurricane and that only its Beaumont operation isn’t back to full production yet. Full capabilities are expected at Beaumont when utilities are restored and this temporary disruption is not expected to significantly impact Goodyear’s tire or engineered products production, Clark said.
Overall, Goodyear said it is still assessing the financial impact of Rita and anticipates that most of the impact will be related to higher production and raw material costs as well as higher transportation expenses, which should be felt in the third and fourth quarters.