AKRON — Goodyear plans to spend more than $100 million to expand production of high-performance tires at its partially owned factory in Poland.
The company will dole out the expenditure to add machinery and increase capacity of high-performance and ultra-high performance tires at Polish affiliate TC Debica S.A. over the next four years. A spokesman didn´t specify what equipment would be added.
Goodyear, which holds a 60-percent interest in the operation, is making the investment to match growing demand for high-value tires in Europe, the spokesman said. He added that the Debica plant is one of Goodyear´s lowest-cost facilities globally and the investment is consistent with the firm´s strategy to manufacture high-performance tires.
"It provides high-quality tires for our European customers," he said. The expansion is not likely to impact the North American market because exports from the factory primarily are aimed at major markets in Europe, according to the spokesman.
The company didn´t specifically name which product lines will be affected by the expansion. The plant produces Goodyear, Dunlop and Fulda brands for Good-year´s European Union business unit.
The tire maker has invested almost $200 million in Debica since acquiring an interest in the business in 1995 and the planned investment demonstrates Goodyear´s commitment "to drive our growth by aligning low-cost manufacturing with high value-added tires," Chairman and CEO Robert Keegan said in a statement.
Goodyear has been working to build a strong tire sales base in the European Union. The segment´s revenues reached a record for any quarter in the fourth period, increasing 15 percent over a year earlier to $1.3 billion. The gains were attributed to higher volumes of winter tires as well as commercial truck tires.
Fourth-quarter segment operating income increased 67 percent to a record $75 million compared to the same period in 2005 because of improved pricing and product mix and cost reduction initiatives, the company said.
The firm estimated higher raw material costs had a $63 million impact on segment operating income during the quarter, but that was partially offset by $49 million in pricing and mix improvements.
Goodyear had record overall sales for 2006 of $20.3 billion, but posted a net loss of $330 million.