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Goodyear (GT) to Slash Jobs in Germany to Modernize Plants

Zacks Equity Research
In first-quarter 2019, Goodyear's (GT) revenues surpass estimates but decline on a year-over-year basis.

The Goodyear Tire & Rubber Company GT plans to cut 1,100 jobs in Germany. This move is sync with its strategy to modernize its plant in Germany. This is likely to enhance the competitiveness of its manufacturing footprint and assist it in the production of large-rim-diameter premium tires. The Goodyear Dunlop Tires Germany GMbH’s facilities in Hanau and Fulda are the targeted plants.

As a result of this rationalization effort, this Akron, Ohio-based tire manufacturing company expects charges of $135 million, with $90 million likely to be incurred in first-quarter 2019. It anticipates this rationalization plan to be completed in 2022.

Goodyear is one of the largest tire manufacturing companies in the world, selling under Goodyear, Kelly, Dunlop, Fulda, Debica, Sava and various other “house” brands (such as Lee, Kingstone, Douglas, Mohave and Republic) as well as private-label brands (namely Roadhandler, Star and Monarch).

The company expects savings generated from this plan to raise the operating income for the Europe, Middle East and Africa business by $60-$70 million annually over period of 3 years, starting from 2020.

Goodyear has an expected negative long-term growth rate of 4.9%. In fourth-quarter 2018, the company’s earnings and revenues missed the Zacks Consensus Estimate. Moreover, the figures were lower on a year-over-year basis.

A few other important stocks in the auto space are Ferrari N.V. RACE, Oshkosh Corp. OSK and Dana Incorporated DAN.

Ferrari, Oshkosh and Dana have expected long-term growth rates of 18.5%, 11.3%. and 39.3%, respectively.

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Oshkosh Corporation (OSK) : Free Stock Analysis Report
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