Goodyear Tire & Rubber (GT) - Get The Goodyear Tire & Rubber Company Report expects to lay off about 1,100 workers as part of a plan to modernize its plant in Germany, the company said Tuesday in a regulatory filing.
The Akron, Ohio-based company said the plan is aimed at Goodyear Dunlop Tires Germany GmbH's tire manufacturing facilities in Hanau and Fulda, Germany, "as part of the company's strategy to strengthen the competitiveness of its manufacturing footprint and increase its production of premium, large-rim-diameter consumer tires."
Goodyear said it expects to complete the plan during 2022 and estimated that the plan's total pretax charges will be at least $135 million, with about $125 million to be cash charges primarily for associate-related costs, and about $10 million for non-cash charges primarily related to asset write-offs and accelerated depreciation.
Goodyear said it expects to record about $90 million of these charges in the first quarter of 2019 and to make cash payments of about $30 million in 2020 and $40 million in 2021. These steps are expected to increase the productivity of both plants and the resulting conversion savings are expected to improve Europe, Middle East and Africa's segment operating income by $60 million to $70 million over a three-year period beginning in 2020, the company said.
Last month, Goodyear reported fourth-quarter earnings of 51 cents a share, a wide miss from the 60 cents that analysts polled by FactSet were looking for. Revenue for the period fell 5% to $3.88 billion, also missing Wall Street's $3.94 billion forecast.
Shares of Goodyear were up 2.6% to $18.25.
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