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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