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December 16, 2020 01:52 PM

Year in Review: Goodyear makes headlines with plant closures, Trump tweet

Erin Pustay Beaven
Rubber & Plastics News Staff
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    Goodyear's had a year.

    The world's third-largest tire maker made news with plant closures—both permanent and temporary, got caught in the political crossfire of a heated presidential election campaign season and celebrated the advancements made in the sustainability arena.

    All in all, it adds up to a busy year for the Akron-based company.

    Gadsden plant shuttered

    Late in 2019, 740 Goodyear employees accepted buyouts at the Gadsden, Ala., tire plant. Less than six months later, the plant was closed.

    Two months after issuing the buyouts, Goodyear laid off 105 employees at the plant and cut the daily production "ticket" to between 2,000 and 5,000 tires. That was down from 17,000 units per day a year earlier and from more than 25,000 units per day only several years ago.

    By April 28, Goodyear had disclosed plans to close the plant, saying in an 8K filing with the Securities and Exchange Commission that the plant closure would yield $130 million in annual savings in 2021.

    On May 5, United Steelworkers Local 12, which represented the workers still at the Gadsden plant, voted 375-107 to approve a proposal to amend its collective bargaining agreement with Goodyear to allow for closure of the facility.

    The plant closed the next day.

    A worker visually inspects a NASCAR racing tire at Goodyear's race tire plant in Akron.

    First to shut down

    The impact of the coronavirus first hit Goodyear in early February, following weeks of outbreaks in China. Goodyear suspended operations at both of its locations in the country on Feb. 9, citing concerns about the spread. The tire maker also suspended travel to and from China.

    By the next month, the virus had spread globally, forcing Goodyear to halt production around the world. It was first tire maker to take these steps.

    On March 18, the company began temporary closure of tire, retread and chemical plants in North and South America and prepared to halt production at tire and retread plants in Europe.

    Shutdowns in the Americas were phased in and were expected to last through April 3, but ultimately went into May. In all, the move impacted 13 tire plants and about 17,000 employees.

    The European initiative included 11 tire plants in France, Germany, Luxembourg, Netherlands, Poland and Slovenia, which collectively employ nearly 12,000 workers.

    As it was idling operations, Goodyear prepared to start the second quarter with furloughs and pay cuts. The company instituted pay cuts/deferrals for associates who continued to work full time with no furlough. CEO Richard Kramer took a 50 percent pay cut.

    Full-time associates were furloughed for three weeks with pay cut/deferral for the remaining weeks of the second quarter.

    These measures affected 4,100 associates in the U.S.

    Tweet storm

    Goodyear made headlines again in August, when President Trump fired off a tweet calling for a nationwide boycott of the tire maker and its products. The call for a boycott came after the president saw a grainy image of a presentation slide that made its way around social media.

    The slide—made by a Goodyear employee, but without corporate authorization—listed acceptable and unacceptable workplace attire. Under Goodyear's "One Team" branding and a "Zero Tolerance" headline, the slide noted that attire with "Black Lives Matter" and "Lesbian, Gay, Bisexual, Transgender Pride (LGBT)" messaging is permitted at work.

    Political apparel with messaging regarding "Blue Lives Matter, All Lives Matter" and political campaigns, including those bearing Trump's "Make America Great Again (MAGA)" slogan, were "unacceptable," the slide said.

    Trump's boycott had potential for far-reaching impact as companies throughout the rubber industry produce Goodyear-branded products from tires to hoses. In particular, Titan International, which makes Goodyear-brand ag tires, was quick to distance itself from the Goodyear Tire & Rubber Co. once Trump called for the boycott.

    Some politicians, including Democratic presidential nominee Joe Biden, backed Goodyear and blasted Trump for calling for the boycott of an American company.

    "Here's the deal: when I'm President, we're going to make made-in-America real again," a statement from Biden said.

    RPN photo by Andrew Schunk
    Union workers rallied in Akron to support the hometown tire maker after President Trump’s call for a boycott of Goodyear tires.

    Union workers throughout the Akron area rallied to show support for the tire maker, while the USW fired back at Trump on Twitter, calling out his inaction when the tire maker closed the Gadsden plant.

    "It would have been nice if the president would have paid as much attention to that loss of American jobs as he does to his MAGA hats," the USW tweeted. "Maybe a tweet or two back then would have been helpful."

    Goodyear, meanwhile, reaffirmed its commitment to supporting its diversified work force, saying it works to foster an environment of inclusion and respect.

    At the same time, the tire maker was able to maintain tire supply contracts with the Department of Defense, which were worth about $48 million and accounted for about 90,000 aircraft and ground vehicle tires.

    Sales, income drop
    If the call to boycott Goodyear had any impact it would be difficult to tell, especially given the sizable hit the COVID-19 pandemic caused for the tire maker overall.

    Goodyear's sales in the Americas region were down 21.4 percent through Sept. 30, coming in at $4.63 billion. The operating result was a loss of $181 million.

    Through the first nine months of the year, Goodyear's tire unit reported an operating loss of $316 million on 21.5 percent lower sales of $8.67 billion. The net loss stood at $1.32 billion, versus earnings of $81 million in 2019.

    Goodyear attributed the sales decline to 24 percent lower unit sales volume, reduced sales from other tire-related businesses and unfavorable foreign currency translation. The unit volume drop was more severe at the OE level (down 31 percent) than in the replacement markets (down 21 percent).

    One for the road
    Goodyear got a boost in the original equipment arena this year, collaborating with Lordstown Motors Corp., a start-up auto maker focused on bringing an all-electric pickup to the U.S. market.

    According to the companies, the LMC's Endurance electric pickup will be equipped with Goodyear tires, and Goodyear will provide service and future "tire intelligence" opportunities.

    "We want to be the tire maker of choice for electric-vehicle manufacturers," said Erin Spring, Goodyear's director of new ventures, "and working with Lordstown represents an ideal relationship with shared Ohio roots and shared values of innovation, performance and sustainability."

    As part of the agreement, Goodyear said it will integrate Endurance pickups into its auto service fleet, enhancing the company's overall sustainability footprint.

    Solar power
    Keeping with its sustainability efforts, Goodyear in June disclosed plans to build a pair of photovoltaic power stations at its testing facilities in Luxembourg and offer the power generated to Luxembourg's primary energy provider to offset power it buys for its tire plants.

    The two photovoltaic power stations will be capable of generating around 5 gigawatt hours of clean energy annually, enough to power 1,200 households for 20 years and reduce carbon emissions by 46.3 tons annually.

    Full circle
    For Goodyear, the year began with job reductions. It looks to be ending that way as well.

    On Dec. 2, the tire maker said it would redeploy "low-volume" passenger tire production at its factory in Colmar-Berg, Luxembourg, to other plants in Europe. The move is intended to reduce costs, shore up profitability and "secure competitiveness in this extremely challenging environment."

    The company has started the consultation and negotiation process on a job protection plan. Subject to this process, Goodyear said it expects to finalize the transfer of the production over a 12- to 18-month time span.

    Related Article
    Kramer sees signs of recovery, encourages tire dealers
    Trump calls for Goodyear boycott
    Union OKs Goodyear proposal to shutter Gadsden plant
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