Goodyear (GT) - Get Goodyear Tire & Rubber Company Report said tire production has been cut 30% by hurricane-related supplier material shortages, and the company is still assessing how financial results will be affected.
The Akron, Ohio, company said most of the hurricanes' impact will be related to higher production and raw-material costs as well as higher transportation expenses, the effects of which will be felt in the third and fourth quarters.
Goodyear added that it has been talking with customers about product needs, and that no deliveries have been put off so far. "We are sensitive to our customer needs and are working diligently to meet their requirements," Goodyear's Christopher Clark said.
The company said all its North American tire and engineered products plants are operating, and that the company expects to increase production as the raw-material disruption eases 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, Goodyear has declared force majeure under certain of its contracts.
Goodyear also said its chemical facilities in Texas suspended operations in anticipation of the hurricane. Production resumed in Bayport and Houston after the hurricane, and the company's Beaumont operations resumed partial production last Friday. Full capabilities are expected at Beaumont when utilities are restored. The temporary disruption at Beaumont is not expected to significantly affect Goodyear's tire or engineered products production, the company said.
On Monday, Goodyear rose 18 cents to $15.77.