By Denna Bowman
Goodyear tyres are cutting jobs and production in a key move to align capacity with weak industry demand.
The tyres company will move from a continuous operating schedule to a five-day, three-shift operation at its Union City plant in Tennessee from 6 July.
The recession has slashed sales by almost 30 per cent as consumers and auto makers skipped purchases and cut orders.
The latest cuts represent just less than a quarter of the 2,300 employees at the plant.
Last month, United Steelworkers (USW) union members at the plant ratified a local labour agreement that permits the schedule change.
Approximately 550 employees at the plant, which can produced around 12 million consumer tyres a year, will receive buyout packages as part of the new working programme.
Goodyear 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, the tyres company said it swung to a first quarter loss due to lower sales and rising prices for raw materials.
The company cut 3,800 jobs during the first quarter and the stock has lost about 40 per cent of its value in the past nine months.