Goodyear cuts private label business

AKRON, Ohio — Goodyear Tire & Rubber Co., the world’s largest tiremaker, on Wednesday said it was axing a third of its private label tire business and cutting manufacturing jobs to improve profits.

The Akron-based company said about 10 brands of tires manufactured by Goodyear but sold under other names to a small number of wholesale customers will be eliminated over the next year. Goodyear will keep the remaining two-thirds of its private label business.

“Today’s announcement is part of our continuing strategy to focus selectively on the more profitable segments of the business. Our intention is to build upon the market strength we have established in our branded and retailer-specific product lines,” said Jonathan D. Rich, president of Goodyear’s North American Tire business.

Last year, the 10 labels generated about $300 million in revenue — 1.5 percent of the company’s total revenue of $19.72 billion last year — with about 8 million units sold, Goodyear said. The tires are made at five plants in North America.

Rich said the decision will mean job cuts, but he was not specific.

Goodyear has been cutting costs as part of its $1 billion turnaround plan it started three years ago after record losses, accounting errors and a stock dive.

Goodyear reported net income of $74 million, or 37 cents per share, for this year’s first quarter on record sales of $4.9 billion, a 2 percent increase from the $4.8 billion in sales a year ago.

Goodyear shares reached a 52-week low of $10.60 Wednesday morning before rising 3 percent to close at $11.46 on the New York Stock Exchange.

Goodyear spokesman Keith Price said on Wednesday that the company is not releasing the names of the brands.

The tires are produced in Fayetteville, N.C.; Gadsden, Ala.; Tyler, Texas; Union City, Tenn.; and Valleyfield, Quebec, he said.

Price said specific details about job cuts and where they will come from will be announced later.

The United Steelworkers of America, which represents the plants’ workers, has been unable to get details about possible job cuts, spokesman Wayne Ranick said Wednesday. He estimated that 1,000 jobs could be lost if Goodyear reduced production of its private label tires from 24 million to 16 million a year.