Goodyear Tire & Rubber Co., the largest U.S. tire maker, will close its main French plant and cut its work force in the country by 39 percent amid labor disputes and plunging auto demand in Europe.
The factory in Amiens in the north of France will be shuttered, with the loss of 1,173 jobs, the company said Thursday. Goodyear currently employs about 3,000 people across the country, Mathilde Davadant, a spokeswoman, said by phone. There’s no set date for the plant closing.
“We are deeply disappointed that the five past years of negotiations haven’t allowed us to reach a compromise with the employees’ representatives,” Henry Dumortier, head of Goodyear’s French unit, said in a written statement. “Today’s announcement is the only remaining option that we have.”
The economic contraction in Europe has caused car and truck sales to plummet to nearly a 20-year low.
Ford has widened its estimate for losses in the region, and Italian carmaker Fiat SpA, which operates Chrysler production in the U.S., scrapped its 2012 dividend on Wednesday to preserve cash after forecasting the auto market slump will continue this year.
Strategy changes that Goodyear has sought to carry out at the Amiens-Nord plant in response to the global recession in 2008 have been stymied by disagreements with labor leaders.
Another tire company, Titan International Inc., decided in December 2011 to drop a 2-year-old plan to buy the factory’s farm tire operations, citing union opposition.
The French plant cost Goodyear $83 million last year in losses, according to the statement.
The tire maker will record a fourth-quarter charge of $74 million for the closing, which will cost in total at least $230 million, the company said.
The shutdown will improve operating profit by $75 million in Europe following its completion, Goodyear said.
In the United States, Goodyear in July 2011 closed its Union City, Tenn., factory that had employed about 1,800 people who made car and light truck tires. The company shifted tire production to factories in Gadsden, Ala., Fayetteville, N.C., and Lawton, Okla. Goodyear said closing Union City was expected to save the company $80 million a year starting in 2012.
Europe’s car market is forecast to drop to 12.3 million vehicles this year, 23 percent below the peak reached before the economy slowed, IHS Automotive estimates. Carmakers across the region have announced 30,000 job cuts since the beginning of July in response to the prolonged slump.
General Motors, seeing Germany at risk of slipping into recession, said last week that its Opel brand could shutter a factory in that country two years earlier than planned as the European auto market sinks for a sixth straight year. The factory employs 3,100 workers. Ford is slashing 6,200 positions and closing three plants in the region.
Peugeot plans to shrink its French automotive operations by 11,200 positions over the next two years. The automaker is also closing a factory in Aulnay outside Paris.