MEXICO CITY, Mexico – The Goodyear Tire & Rubber Co. has announced it will build a new tire factory in San Luis Potosi, Mexico, to serve its customers in the Americas. Goodyear Chairman and CEO Richard Kramer made the announcement in San Luis Potosi at a ceremony with Mexican President Enrique Peña Nieto.
The company says this new factory, combined with investments in its existing U.S. and Canadian factories, will enable Goodyear to meet the strong and growing market demand for high-value-added (HVA) consumer tires in North America and Latin America. Industry demand for HVA tires in these regions is expected to increase by 10 million tires per year from 2014-‘19.
“This is an important investment in Goodyear’s future,” said Kramer. “Our new factory will provide us with a world-class manufacturing asset and will be a strong complement to our existing plants in North America and Latin America. The new plant advances our strategy to serve the needs of our customers and is consistent with our focus on investing in high return projects that drive profitable growth.”
The new factory, to begin production in mid-2017, will be Goodyear’s most technologically advanced and willhave a capacity of about 6 million tires per year. When it reaches full production, the factory will employ about 1,000 people.
Goodyear said the selection of San Luis Potosi was the result an extensive review of potential locations throughout the Americas. The review took into consideration factors including cost structure, logistics, infrastructure, skilled workforce, tariffs and quality-of-life issues.
The new factory will be a zero-waste-to-landfill and zero-solvent facility, and it will use natural gas, energy efficient LED lighting and state-of-the-art dust collection equipment.
Total capital investment for the project will be approximately $500 million to $550 million, net of government incentives, and is consistent with the company’s existing capital allocation plan. Goodyear’s outlook for 2015 and 2016 capital expenditures remains unchanged at $1.1 billion and $1.2 billion to $1.3 billion, respectively.
