Goodyear Closes French Plant image

Goodyear announced it will close its main plant in France and cut the work force in the country by 39%, due to labor disputes and sluggish demand in Europe.

Goodyear announced that its main plant in France, located in Amiens, will be closed, causing a loss of 1,173 jobs, from the total of 3,000 workers the company currently employs in the country. The tire manufacturer didn’t offer the date for the plant’s 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.”

Last year, car and truck sales in Europe reached the lowest level in almost 20 years due to the sovereign-debt crisis. The French facility cost Goodyear losses of $83 million and the company will have to pay $74 million more for closing the plant. Still, the shutdown will increase operating profit in Europe by $75 million.

Analysts predict auto market in Europe to fall 23% to 12.3 million vehicles this year, compared with the pre-crisis level. Automaker on the continent have already announced 30,000 job cuts since July, due to the prolonged slump.