Goodyear job cuts follow others in chem industry
HOUSTON (ICIS)– In a measure that it says will save $55m, Goodyear Tire & Rubber announced plans on Friday to eliminate about 500 jobs, in response to weakening demand and inflation concerns.
“Our fourth-quarter results fell short of our expectations given a significantly weaker industry backdrop, particularly in Europe,” CEO Richard Kramer said.
The cuts, expected to be completed in the first half of this year, are about 5% of Goodyear’s total workforce.
Tyre demand fell about 12% during the period in other global markets, which will result in an operating loss of around $80m.
Goodyear’s announcement comes after Dow said Thursday it plans to cut 2,000 jobs from its workforce and close plants, potentially in Europe, as part of its $1bn 2023 cost saving drive.
Also this week, US Eastman announced plans for a 3% reduction in its global workforce.
The automobile industry is a very important end market for chemicals.
The global automotive industry was hit by one shock after another during the year. Looking back, 2022 started with a growth expectation of 8.8% year on year, but actual growth was 6.1%, according to Oxford Economics.
The last few years have been extremely tough. For example, 2020 was one of the worst on record as the industry was one of the first and hardest hit by the pandemic – and has yet to make a full recovery. And 2021 was also challenging due to the semiconductor shortage – as supply was diverted to the electronics industry. And 2022 has also been difficult due to geopolitical tensions.
The Russia-Ukraine war has impacted the auto industry because Russia is a leading producer of palladium – a key material used in computer chip production.
The supply of neon gas, which is also used in making microchips, has also been constrained. 2023 is also expected to be challenging for the industry due to the cost-of-living crisis, because car buyers are expected to postpone purchases.
Additional reporting by Will Beachem and Morgan Condon
Thumbnail shows a tyre, the main produce made by Goodyear. Image by China Photo/Shutterstock
Speak with ICIS
Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.
Want to learn about how we can work together to bring you actionable insight and support your business decisions?