Goodyear posts loss, laying off 5,000 workers
When car sales dip like they have over the past few months, in many cases suppliers feel the pinch even more than the automakers. That's the case at Goodyear, where production is down by 19% and losses are beginning to pile up. The tire giant lost $330 million in Q4 2008, compared to a $55M profit in Q4 2007. To help adapt to challenging times, Goodyear is tasked with reducing its operating costs by $700 million in 2009, and part of that reduction will come from layoffs. 5,000 salaried and hourly workers will be laid off, or 6.7% of Goodyear's global workforce. The workforce reduction comes on the heels of the 4,000 jobs that were already slashed in 2008.
The automotive sales nosedive has accelerated over the past six to eight months, but Goodyear, like the domestic auto industry, has been cutting back for some time. The tire giant has reduced costs by $1.8 billion over the past three years through layoffs, production cuts, and plant closings. Goodyear plans to further cut production by 15,000 to 25,000 tires to better align production with demand.
[Source: Automotive News - Sub. Req.]
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Reader Comments (Page 1 of 1)
ASEVENSEE4 6:36PM (2/18/2009)
Goodyear supplies some horrible tires to OE's. Eagle LS and RS-A's are the worst that come to mind. Decade old design, with horrible wear still being sold and put on new cars in the masses.
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chconline 7:12PM (2/18/2009)
Despite what I've read and heard, I didn't find the Eagle RS-A's that bad lol.
ASEVENSEE4 7:14PM (2/18/2009)
They're all-seasons with a wear rating of a max performance summer tire with none of the performance. That says it all really.
Frank Hoffman 7:14PM (2/18/2009)
I'll have to agree with that statement. The Goodyear Wrangler HP's that came on my Dodge Ram were downright dangerous.
Frank Hoffman 7:21PM (2/18/2009)
Also, although it's bad that these people lost their jobs, I found the picture of the flat tire in the article very funny for some reason.
Adam 8:33PM (2/18/2009)
I bought a used car with a brand-new set of Goodyear Integritys. I got rid of them after 1000 miles because they were bad to the point of being dangerous. Driving in rain felt like driving in slush with any other tires- they'd break loose if I so much as blipped the throttle at 45 mph. I can't imagine how many accidents those things must have caused.
After researching replacements, I ended up going with Goodyear Assurance TripleTreds, and they're among the best all-seasons I've ever owned. I can now corner in the wet at speeds that made the Integritys scream on DRY pavement.
I guess Goodyear is kind of like the American auto industry in general-- they're perfectly capable of making excellent products when they want to, but they've alienated so many customers with shoddy junk that it doesn't really matter.
phooky 6:39PM (2/18/2009)
sounds like goodyear had a badyear
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Quattroporte 7:05PM (2/18/2009)
How did the brilliant, comical blogging minds at autoblog miss that?
CarbonBlack 6:42PM (2/18/2009)
So this is the "ripple effect" we keep hearing about.
I am not a big fan of the recent legislation, but as long as we are spending the money, I hope it helps these honest/hardworking people!
I wish the best of luck to ALL those that have lost their employment!
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2004m3driver 7:16PM (2/18/2009)
Just can't escape bad news any more without living in a cave. Sigh such bad times.
Big Rocket 9:56PM (2/18/2009)
@CarbonBlack: When you wrote honest and hardworking people, do you mean the crooks on Wall Street, or the crooks in the unions?
Farris 6:47PM (2/18/2009)
The problems that the auto industry are have must be a real thorn in the side of Goodyear...
They're probably pulling their hair out going bald over money problems.
Hopefully they avoid going into a skid...
I sure hope they can inflate their profits.
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scott 3 11:12PM (2/18/2009)
Goodyear may have has a bad quarter but most of the other tire companies have had as bad or worse.
As for the OE tires. It is not just Goodyears OE tires that suck but most OE tires that suck.
Auto companied don't want to pay anything for OE tires so tire companies may little to nothing on them. Goodyear in the last few years has been finishing contracts and pullng out of the OE market.
Note the best tires you can get seldom are OE weather it is Goodyear, Michelin or Bridgestone.
The RS-A, Integrity and LS will all vanish soon as Goodyear is dropping them. But MFG will not buy Assurance tires as they are quality and much more costly as they are great tires. You get what you pay for with a tire.
Out side some high end cars most all OE tires are crap no matter the maker.
Goodyear will intro near 40 new tires in the next year and almost all are directed at the replacment market.
Goodyear slipped under their last CEO but their present one Robert Keegan has put them back where they should be and they are in a good position to ride this out vs some of the the other competitors.
Might want to check the stuggles of Michelin of late with slipping profits and Quality.
A Han Kook OE tire speak volume of how much MFG want to pay for a tire.
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autonewseditor 9:17AM (2/26/2009)
Goodyear, like many american manufacturers is confused about it primary purpose - to manufacture great products. Like many they baloon with unrelated expenses due to poor management. This results in more poor decisions to cover up for their mistakes. A clear example of this is when car manufacturers dealers became dendent upon selling alot of services and used cars to it's customers to make up for poor margins on new cars. That happened due to poor controll of their distribution and pricing. The same issue is now happening to Goodyear and other tire manufacturers. Goodyear for example has a gigantic department of management with low productivity performing tasks that have little to do with manufacturing and distributing their core product. Now they are about to launch their next attempt to solve their margin issues - by selling tires online - themselves - directly to consumers. Thier idea as it was explained to our source at the Goodyear Dealer Conference (the source was a little tipsy at a nearby bar) freely explained that they have been collecting data from Goodyears dealers about what prices they are retailing the tires for. Goodyear is desperate for cash and someone said - "hey why don't we take that money from our delaers and other online sellers and just sell direct!". My Masters Degree tells me this is a bad idea with serious repercussions for their industry and will result in comoditizing a product already criticized for being a comodity. It will be interesting to see how it's resellers will feel about making a small commission for mounting the tires instead of selling them. Some of their online sellers already sell their product just above a zero sum margin. Goodyear has spent millions on developing some high tech products only to tell consumers their tires are no different than any others. Manufacturers in the US need to take a page from Honda or Toyota or even BMW and Mercedes. These manufacturers controll their distribution, while not without pressure from recent economic issues, their supply chain to market maintains margin and sales volume apropriate for their expense structure - without acrobatics so common to US companies that ultimately lead to the issues they are suffering now. Same goes for Banks that created products and departments not in line with their core business. I suppose desperate people perform desperate acts. We'll watch this as it develops .
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