Goodyear to tighten EMEA production to combat 'volatile' environment

AKRON—Goodyear is tightening up production activities across its Europe, Middle East and Africa (EMEA) operations in response to "highly volatile economic environment" in the region.

During the fourth quarter of 2022, the Akron-based tire maker plans to reduce production by approximately 10 days (1.5 million units) at most of its European factories.

The move is "to address softer demand and prevent the build-up of excess inventory," Goodyear said in a note within its third quarter results statement, issued Oct. 31.

Furthermore, the U.S. tire manufacturer said that it had taken actions to address energy shortages and potential disruptions in response to the ongoing energy-crisis in the region.

The actions include conservation and energy-efficiency projects across manufacturing plants, according to the Akron group.

The projects will have a positive impact on consumption in the near-term and support the group's sustainability efforts in the longer term, it said.

"In addition, we have prepared our European factories for the use of alternate fuel sources to ensure consistent supply to our customers going forward," it added.

Last month, Goodyear unveiled its EMEA rationalization plans, involving the closure of motorcycle tire production facility in Melksham in the United Kingdom and the consolidation of bike tires manufacturing in France.

Total expected pre-tax charges related to the plan are expected to be between $80 million and $90 million, according to Goodyear.

The tire maker also has approved a plan to exit its TrenTyre retail operations in South Africa, with total expected expense and cash charges of $18 million.

Taken together, Goodyear said, the full run rate savings for the plans are expected to be $30 million by 2024.