MEXICO CITY—Goodyear will invest about $500 million to build a new tire factory in San Luis Potosi, Mexico, to serve its customers in the Americas.
Chairman and CEO Richard Kramer made the announcement on April 24 in a ceremony with Mexico President Enrique Pena Nieto. The executive said Goodyear plans to break ground on the facility in June.
It will be Goodyear's first tire manufacturing plant in Mexico. The firm operates six in the U.S., two in Canada and five in Latin America—in Brazil, Chile, Columbia, Peru and Venezuela.
“This is an important investment in Goodyear's future,” Kramer said in a statement. “Our new factory will provide us with a world-class manufacturing asset and will be a strong complement to our existing plants in North America and Latin America. The new plant advances our strategy to serve the needs of our customers and is consistent with our focus on investing in high return projects that drive profitable growth.”
Goodyear said the factory is projected to begin production in mid-2017 and that it will be the firm's most technologically advanced with the capacity of about 6 million tires per year. A company spokesman said the firm has not outlined capacity scale targets yet.
Once it reaches full production, employment is projected to reach 1,000 people. Goodyear did not disclose how big it projects the building to be.
The new factory will enable it to meet the strong and growing market demand for high-value-added consumer tires in North American and Latin America, the company said. Industry demand for these kinds of tires in the region is expected to increase by 10 million tires per year from 2014 to 2019, according to the firm.
“Demand for our high value added tires and those throughout the industry is high and growing,” the spokesman said. “Our difficulty has been producing enough of those tires to satisfy demand and meet our customer's needs. This new plant when it comes online, along with the investments we're making at our existing plants, will help us respond to consumer demand.”
Goodyear selected San Luis Potosi after an extensive review of potential locations throughout the Americas. The process took into factors like cost structure, logistics, infrastructure, skilled workforce, tariffs and quality-of-life issues.
The spokesman said other sites in the U.S. and Latin America were considered, but the firm did not elaborate which others were in contention. Kramer also cited the site's central geographic location as another strength.
“In the end we chose a location where we could best serve both our Latin American and North American markets, including Mexico,” the spokesman said. “This location has the infrastructure and the skilled work force necessary to provide our customers high quality tires in a timely manner.”
Goodyear said the new factory will be zero waste-to-landfill and a zero solvent facility, use natural gas and energy efficient LED lighting, and state of the art dust collection equipment to meet the firm's commitment to the environment.
To see a video of the announcement, click here.