Tyre company Goodyear on Saturday said it will close its plant in the Philippines and cut 500 jobs as part of its strategy to trim production capacity and cut costs.
The plant in Las Pinas will shut down by September and reduce approximately 500 of the company's 600 associates in the Philippines, a company statement said.
Ohio-based Goodyear Tyre & Rubber Company said the move will lead to the reduction of nearly 2 million units of annual production capacity, which is a part of its strategy to remove 15 million to 25 million units of capacity over the next 2 years.
Production will be transferred to lower-cost plants in the company's Asia-Pacific Region, as Goodyear seeks to address uncompetitive manufacturing capacity globally.
"Due to high costs compared to other plants in the region, tyres produced in the Las Pinas plant are not competitive in the marketplace," Goodyear Asia-Pacific Region President Pierre Cohade said.
This action will neither affect the company's sales and marketing operations in the country, nor disrupt its services to wholesale, retail and original equipment customers.
The company plans to record approximately $20 million as charges associated with the closure in the third quarter of 2009, principally for non-cash asset write offs.
Goodyear, which has had a presence in the Philippines since 1919, opened the Las Pinas plant in 1956.