From Tire Review Staff & Wire Reports
AKRON, OHIO — After weeks of undenied rumors, Goodyear Tire & Rubber Co. this morning announced that it would sell its North American agricultural tire operations to Titan Tire Corp., a subsidiary of Titan International. But the Goodyear name won’t disappear from the sidewalls of farm tires. The deal grants Titan a license to sell Goodyear-branded tires in North America.
The sale, Valued by Goodyear at $100 million, includes Goodyear’s Freeport, Ill., farm tire plant, manufacturing equipment and inventories, as well as the licensing deal.
One possible hitch to the deal – the USWA, which has a less-than-positive history with Titan. Goodyear’s current labor agreement, which covers the Freeport plant, requires that before Goodyear can sell a union-covered plant, the USWA must negotiate a new agreement with the prospective owner.
Titan and the USWA faced off in a 40-plus month strike at Titan’s Des Moines, Iowa, and Natchez, Miss., plants, which finally ended in late 2001. The Natchez plant was subsequently closed. In 2003, Titan also closed its plant in Brownsville, Texas, which opened in 1999.
There was no immediate word if negotiations had started, or the status of any such talks.
Goodyear said the sale will result in a one-time gain, but on an on-going basis, the sale would result in a revenue reduction of about $200 million annually. However, selling the unit, which reportedly has been losing money over the past few years, would improve Goodyear North American Tire’s earnings and eliminate the need for further capital investment in the Freeport facility.
“This agreement is important in that it allows Goodyear to sell a non-core asset in a business that has been challenging to our earnings, yet allows continued access to the same high-quality Goodyear-branded tires from a company that considers the farm business as core,” said Jon Rich, president of Goodyear North American Tire.
“Goodyear tires have been a part of the North American farm for more than 100 years,” Rich said. “It was important to us to continue to have Goodyear farm tires as part of the North American farming community.”
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