DOW JONES NEWSWIRES
Goodyear Tire & Rubber Co. (GT) will buy out 550 workers and reduce production at a plant in Tennessee to match its operations to lower demand.
The recession has slashed sales almost 30% as consumers and auto makers skipped purchases or cut orders.
On July 6, Goodyear's consumer tire plant in Union City, Tenn., will change from continuous operations to a five-day, three-shift operation. The cuts represent just less than a quarter of the 2,300 employees at the plant.
United Steelworkers members at the plant approved the change early last month.
The tire manufacturer expects to record about $60 million in restructuring charges related to the moves. Most charges will be posted in the second quarter, though the cash severance payments will be paid primarily in the third quarter.
In April, Goodyear said it swung to a first-quarter loss on lower sales and rising raw material prices. The company cut 3,800 jobs during the first quarter.
Goodyear's shares closed Friday at $12.23, up 1.2%, and were inactive after hours. The stock has lost about 40% of its value in the past nine months.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com