Goodyear Cuts 5,000 Jobs, Freezes Salaries

Another bad news comes from the US, this time from a tire manufacturer. Goodyear Tire & Rubber Co. has announced it will cut nearly 5,000 jobs and will freeze salaries to the remaining ones. The announcement came as a part of the company's 2008 full year financial report, released today.

Goodyear’s sales in the fourth quarter of 2008 were $4.1 billion, down from $5.2 billion in the 2007 quarter, bringing the company's total net loss to $330 million. The current developments forced the board to take “aggressive action, reducing tire production, cutting costs and adjusting investments to better match market conditions,” said Robert J. Keegan, Goodyear CEO.

This year's planned personnel downsizing comes in addition to the 4,000 jobs that were cut in the second half of the last year. By doing so, in addition to several other measures, Goodyear plans to further reduce costs by approximately $700 million in 2009 and has therefore raised its four-point cost savings plan target to $2.5 billion.

To reach that objective, the tire manufacturer will also introduce cost control policies to eliminate non-essential discretionary spending and production downsizing of 15 to 25 million units over the next two years.

And since the best defense is offence, the manufacturer plans an unprecedented number of new product launches in 2009, with more than 50 new tires being introduced globally. Targeted to key segments, these include the new Assurance Fuel Max tire introduced earlier this month in North America and recently announced as original equipment on the new Chevrolet Volt electric vehicle.

“Collectively, these actions address the new economic realities,” said Keegan. “We will remain flexible and are prepared to take additional actions if market conditions warrant. Our goal is to ensure Goodyear is positioned for success when tire markets recover.”
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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