MEXICO CITY, April 24, 2015 /PRNewswire/ -- The Goodyear Tire & Rubber Company (NASDAQ: GT) today announced it will build a new tire factory in San Luis Potosi, Mexico to serve its customers in the Americas. Goodyear Chairman and Chief Executive Officer Richard J. Kramer made the announcement here today at a ceremony with Mexican President Enrique Pena Nieto.
The 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 have a capacity of about six million tires per year. When it reaches full production, the factory will employ about 1,000 people.
Goodyear's selection of San Luis Potosi follows 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.
"San Luis Potosi is an ideal location for the new factory. Its central geographic location will enable us to support our valued customers and consumers throughout North America, Mexico and Latin America," said Kramer.
The new factory will reflect Goodyear's commitment to the environment. It 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. Its outlook for 2015 and 2016 capital expenditures remains unchanged at $1.1 billion and $1.2 billion to $1.3 billion, respectively.
Goodyear is one of the world's largest tire companies. It employs about 67,000 people and manufactures its products in 50 facilities in 22 countries around the world. Its two Innovation Centers in Akron, Ohio and Colmar-Berg, Luxembourg strive to develop state-of-the-art products and services that set the technology and performance standard for the industry. For more information about Goodyear and its products, go to www.goodyear.com/corporate. GT-FN
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