I’m not sure how else to explain the upcoming closure of a major Goodyear factory in North Carolina.
The article also says Goodyear has another plant in Statesville, NC. Perhaps they are just consolidating operations?
As for opting for cheapo tires, I suppose that’s always been the case for a certain segment. Not just the “value-minded” shopper but for the many used car dealers and small indy shops. Many major manufacturers have a lower-tier product. Back when Centric was a great name for brakes and wheel-end products, they had their main Centric line and the C-Tek stuff aimed at used car dealers and low-price shoppers.
Statesville is about a 2.5 hour drive from Fayetteville. I doubt that many, if any, Fayetteville employees could commute to Statesville from their current homes. With a distance like that, Goodyear could transfer production to any of the 17 other plants. Since they haven’t formally informed the NC government about the closure, I suppose there’s an outside chance that the Fayetteville facility might remain open.
Besides the losses of almost $2 Billion and Weak Demand for tires (so many cheapo choices on the market…), and the rising cost of raw materials… that “55-year old Plant” has an issue with its aging infrastructure… The Fayetteville facility features older buildings (some older than 60-years old…) and aging equipment that require constant repair and significant capital investment to replace it with more efficient and dependable equipment…
So the company decided that consolidating its production into more efficient facilities is a necessary step to secure the long-term health of the business.
At least they are NOT filing bankruptcy… (NOT Edited in…)
Goodyear is filing for bankruptcy?
I missed that detail, Mr. Thunder.
You did nto miss it, it was not there… I “miss” typed and did not include the "NOT filing for bankruptcy… Good catch, I have edited the earlier posting to correct my error…
I bought 90,000 mile Goodyear Aquatreads. I quit working andfmy mile per year dropped from 10,000 a year to 2000 or less. They dry rotted after 9 years and I replaced them with much cheaperBF Goodrich Altamaxc
I just don’t need longer lasting tire anymore and my eyes get too tired for long trips.
It’s a sad fact that it is cheaper to build a new factory from scratch than it is to refurbish an old one. Add the fact that local governments are more than willing to provide incentives for companies to build new factories in their area, and what you have is a recipe that says, the older the factory, the closer it is to closing - and unfortunately that also means a lot of people will lose their jobs - older employees in particular.
This is nothing new. Every downturn in the economy means old factories close.
The accelerating pace of layoffs in The US would seem to support that premise.
Growing up I had a hard time understanding that. But now I understand, especially when the huge tax incentives governments offer for new plants are considered. It’s something like how a car can be considered “totaled” with less damage than you’d think.
It took me a while to realize that refurbishing an old factory meant removing heavy machinery, redoing the shop floor (and sometimes foundations), then bringing in the new equipment which may be difficult to fit in the space vacated. Building a new factory means doing only half of that!
Just a few anecdotal comments. If the tax was not so high, tax incentives would have little impact. In our little town we had a cooling equipment manufacturer in the 50s. They built a new plant and the old plant was taken over by a can manufacturer. Working fine to this day. We had a caster manufacturer that moved to SD for the taxes. The old plant is now in use making something and the office was converted to a mosque. I worked at all three at one time or another but not the mosque.
Do a search on used tires and you get a surprising amount of hits… Like this one
Cheap tires have always appealed to a certain segment of the population. If one of those buyers bought a Mustang Mach 1 like mine, they’d go straight to the used market instead of the $2000 per set tires that are available that fit my car.
That said, I agree that Goodyear’s closure is not predicated on cheap tires so much as it being a 55 year old plant. It is better left to the machine scrappers. The location of a new plant can hinge on taxes and tax incentives, for sure. It can also depend on the red tape required to build on a new site as well as building codes.
They may also want to walk away from whatever chemicals seeped into the ground during the 55 year run. Lots of chemicals have been found to be dangerous in the last 30 years that no one ever considered 55 years ago. Assuming, of course, the laws in the area allow that liability to fall on the new plant’s owners.
A more nefarious reason might be to divest themselves of looming pension liabilities of the existing workforce. They know full well that only a very small percentage of workers will relocate to a new site 2-3 hours away so the employee accepts a buy-out. Pension benefits (if they still have them beyond a 401K) are generally very non-linear so an “early-out” saves significant pension liabilities for the average worker.
The U.S. has transitioned from a labor-heavy industrial powerhouse into an economy primarily driven by the service sector and specialized construction. While manufacturing remains a massive generator of national wealth and high-value research, it accounts for a smaller share of overall jobs and Gross Domestic Product (GDP).
So, for a really sorry anecdotal observation, if you want to stay employed, get into the construction trade (Building, Refurbishing, and Demolition) during the good weather and the service sector (Wait Staff, Barista, Healthcare, and Hospitality) during the off season…
I continue to firmly believe many businesses view their employees as a major financial liability and burden
In 1968, I worked as a machine mechanic at a Fuller Brush factory in upstate New York; my wages were $7.35 an hour (that’s over $70.00 an hour in today’s dollars…). The factory was in a 30 plus year old building and we had both new and older machines for making the various products that they sold: besides hair brushes and brooms, they also had a full line of cosmetics and cleaning products…
We were notified that the factory was moving to Tucson, Arizona… All the employees were given various packages; everyone was guaranteed the same wages. The folks with more than 30-years would have all their moving expenses provided, and with reducing benefits as you had less seniority… I was in my second year and I was only offered my same job, at the same pay…
We all knew that they were moving there for the lower wages paid at that time, especially so close to the border… I did not take the offer, knowing full well that with the slightest infraction and I would be a long way from home, with no job…
The old hands did not take the offer as most had no family in Arizona and they were not about to move after living so long in one place…
I was offered a bonus to stay until the lights were turned off, but I left before the bulk of the folks were all looking for jobs elsewhere…
Up to then, I never felt like I was just the number on my time card…
Years ago, as a teenager I was told the U.S. does not need those low paying jobs, it is better to buy products from manufactures in poor countries. This made sense to my elders who had jobs but what about myself and future generations? A low paying job is better than no job.
Goodyear has manufacturing facilities all over the world. If the import tax remains at a low rate, what is the incentive to construct a new manufacturing plant in the United States? Goodyear must compete with other major tire manufactures that import tires. It may be an economical advantage to ship tires from Asia or Mexico.
For me, it was four years of those low paying jobs during and after high school that taught me I’d never get anywhere unless I learned some skills.
I used to counsel new, young employees not to consider the company as loyal to them. That they would get dumped into the parking lot with a bankers box of their office stuff if it suited the company. I told them the best way to avoid this was to make yourself more valuable to the company than the person to your left or right.
And even then… My wife was laid off from GM 3 times from 3 different divisions. Frigidaire (closure - union), Delco Moraine (economy layoff - union) and Motors Insurance Corp. (office closure - salary).
When I became a manager, I couldn’t do that anymore. And I became the one to hand out pink slips when the economy tanked. The first 10% was easy. The next 10% was MUCH harder. I understood the need but it was awful nonetheless.
We are all just numbers on a time card.