Goodyear plans expanded capital investments

AP News
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Posted: Mar 22, 2011 4:46 PM
Goodyear plans expanded capital investments

Goodyear Tire & Rubber Co. will make plant investments over the next two years aimed at increasing production of more profitable high-end products, the tire maker said Tuesday.

Chairman and CEO Richard Kramer said in a statement the company would make capital investments of $1.1 billion to $1.3 billion in 2012 and 2013. That is up slightly from this year's expected $1.1 billion to $1.2 billion.

Between $500 million and $600 million each year will go toward modernizing and expanding plants and new construction.

The investments are intended to boost annual tire production by up to 5 percent, with a focus on high-end products.

The Akron-based company lost $216 million in 2010, reflecting a $160 million charge to close a plant in Union City, Tenn.

Goodyear shares fell 36 cents, or 2.3 percent, to close at $15.03, near the upper end of its 52-week trading range of $9.10 to $15.71.

The company said it expects segment operating income of $1.6 billion in 2013 and segment operating income of $450 million in its core North American tire unit in 2013.

The company's pursuit of high-end products and likely trends in the industry in the next five years to 10 years "favor Goodyear and our well-established innovation capability," Kramer said.

Goodyear said it expects its pension expense to drop by $100 million a year by 2013, based on planned pension contributions.