From AFX News Limited
CLEVELAND, OH — Goodyear Tire & Rubber Co. is considering building new tire factories in Eastern Europe and Asia by using money from the recent sale of its engineered products business.
On Aug. 1, Akron, OH-based Goodyear completed its sale of nearly all of engineered products for $1.48 billion to EPD Inc., part of Washington-based private equity firm The Carlyle Group.
Goodyear did not disclose how many new tire factories it is considering or specifically where in Eastern Europe and Asia they would be built. The company still plans on investing in existing tire factories to increase capacity of higher priced and more profitable tires by 40 percent, including plants in Fayetteville, NC, and Gadsden, AL.
Goodyear’s plan to have half of its global tire production capacity in low-cost countries by 2012 follows a 12-week strike that ended in early January involving workers at its North American tire plants. Steelworkers agreed to allow Goodyear to close a plant in Tyler, TX, where about 1,100 workers have made wholesale, private-label tires.
"Consistent with what we have been telling investors, the successful completion of the sale of engineered products combined with our equity offering in May allows us to expand our future growth investments," Robert Keegan, Goodyear chairman and chief executive said.
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