South Pacific Tyres streamlining Australian operations

MELBOURNE, Australia (Sept. 28)—South Pacific Tyres, the Pacific Dunlop Ltd.-Goodyear joint venture plagued by losses the past 18 months, will close two of its three factories in Australia and streamline administration in the coming nine months, resulting in nearly 900 job cuts. South Pacific Tyres will close its 67-year-old Footscray, Australia, commercial and farm tire plant by March 2002 and the 38-year-old Thomastown, Australia, passenger car tire plant by July 2002. Passenger car tire capacity from Thomastown will be consolidated at the 40-year-old Somerton plant. The Footscray and Thomastown closings will affect 440 and 380 employees, respectively. In addition, the company will trim its corporate and executive staff by 70. The company, which claims a 35- to 40-percent market share in Australia, has blamed its losses on the struggle to compete with rising imports. In the fiscal year ended June 30, South Pacific Tyres suffered a $16 million pretax loss on 9.3-percent lower sales. The companies did not disclose what the closings will cost, nor what the potential savings will be. Earlier this year, South Pacific phased out truck tire production at Somerton, and more recently Pacific Dunlop struck a deal with Goodyear giving it the option to sell its stake in South Pacific in the coming four to five years.