by Alex Kapadia
Goodyear tyres is axing 5,000 jobs worldwide after the global downturn in the car industry led to larger-than-expected losses in the fourth quarter.
The largest US tyres maker has also frozen salaries worldwide and cut production capacity as part of the plan to reduce costs by £492 million this year.
The Ohio-based tyres firm, which has not said whether it will shed jobs in the UK, posted a net loss of £232m in the fourth quarter, compared with a profit of £36m a year earlier.
However, Goodyear acted swiftly to counter the concern over the falling figures along with cutting an additional 6.7% of the workforce, stated it will also sell non-core assets.
Robert J Keegan, Goodyear CEO and chairman, said: “We will remain flexible and are prepared to take additional actions if market conditions warrant. Our goal is to ensure Goodyear is positioned for success when tyre markets recover.”
With US car sales sinking to a 27-year low, Goodyear had already cut nearly 4,000 jobs in the second half of 2008 and had 75,000 employees worldwide at the end of last year.
Goodyear said the planned 5,000 job cuts will come from the salaried and hourly ranks worldwide, but did not specify how the cuts would be divided or what regions they would come from.
As the credit crunch bites and cautious consumers are turning their backs on new cars, they are also looking for cheaper ways to maintain their old vehicles.
This has led to a sharp rise in sales for etyres, the UK’s leading online tyres company. Its mobile tyres fitting service rules out the need for expensive garages and without high overheads it means the savings are passed on to consumers with tyre prices up to 40% cheaper than the high street depots.