Dec 29 2005
The Goodyear Tire & Rubber Company today announced it has completed the previously announced sale of its North American farm tire assets to Titan Tire Corporation, a subsidiary of Titan International, Inc.
The sale includes Goodyear's farm tire manufacturing plant, property and equipment in Freeport, Ill., and inventories. It also includes a licensing agreement with Titan to pay a royalty to manufacture and sell Goodyear-branded farm tires in North America.
Goodyear received $100 million from Titan for the assets. It expects to record a loss of approximately $65 million on the sale, including charges for the curtailment of employee pension and post-retirement medical plans, of which approximately $60 million will be recorded during the fourth quarter of 2005 and the remainder will be recorded during 2006.
On an on-going basis, the sale will reduce revenue in Goodyear's North American Tire segment by about $200 million annually, but will eliminate the need for further investment in the farm tire business and position the company to enhance the segment's profitability.
"Goodyear tires have been a vital part of the American farm for nearly a century," said Jonathan D. Rich, president of the company's North American Tire business. "This transaction helps that relationship continue and allows us to increase our focus on our core consumer and commercial tire businesses."
Rich expressed his confidence that Titan Tire, for whom farm tires are a core business, will seek to maintain relationships with Goodyear farm tire dealers and the farming community.
"I thank our farm tire associates and dealers for their many years of service and support," he added.