AKRON—Goodyear is planning to retool its Asia-Pacific operations to a third-party distribution and retail sales model, with the goal of improving profitability in Australia and New Zealand.
The proposed "rationalization plan," revealed in an 8K filing with the U.S. Securities and Exchange Commission on Sept. 19, said the company plans to:
- Eliminate approximately 700 positions;
- Exit nine warehouses; and
- Facilitate the sale of approximately 100 retail and fleet locations in the region.
Goodyear estimated the plan would improve the Asia-Pacific segment's operating income by around $50 million to $55 million by 2025 and annually thereafter, as a result of selling those locations as well as due to lower administrative and general expenses.
Goodyear said the plan is subject to consultation with representatives of employees in the region. It is targeting year-end 2024 for completion.
According to the filing, the plan is "part of a broader set of actions" that Goodyear expects to take in order to "streamline its business, improve its competitive position and drive growth."
Goodyear operates more than 370 retail outlets in Australia under the Beaurepaires and Goodyear Autocare brands, alongside the Dunlop Super Dealer affiliated dealer network of about 150 independent dealers.
In the filing, the Akron-based tire maker said it plans to discuss the moves in more detail during its call with investors in the fourth quarter.
Goodyear estimated that the costs to execute the plan will be between $55 million and $65 million. It said in the filing it expects to record around $20 million of pre-tax charges related to the plan in the third quarter and another $5 million of pre-tax charges in the fourth quarter.
The rest of the costs will occur in 2024, Goodyear said.