Goodyear Plans $500M American Tire Plant

Goodyear says it will spend $500 million to build a new tire plant that will produce about 6 million tires a year for Goodyear’s North American and Latin American customers.

The company expects to decide on a location for the plant in early 2015 and said production should start in early 2017.

The Akron, Ohio, company also said it will reallocate $1.1 billion out of its cash flows from 2014 to 2016. It is raising its quarterly cash dividend to 6 cents from 5, and will add $350 million to its stock-repurchase program.

That means the company has approved the repurchase of as much as $450 million in stock through the end of 2016. Goodyear Tire & Rubber Co. says it could further expand the buyback program based on its financial performance. The company also plans to spend another $400 million on debt reduction.

Early this year, Goodyear announced it had fully funded its hourly pension fund with a $1.15 billion cash payment, ending more than a decade of dealing with the issue. The company said it was able to do so because of its strong cash flow in 2013.

This article appeared in print in the May 30th, 2014 edition of Hamodia.