Goodyear To Close Venezuela Unit, Offers Severance Packages
Zacks Investment Research | Dec 10, 2018 08:12PM ET
Per Bloomberg, The Goodyear Tire & Rubber Company (NASDAQ:GT) has announced the shutdown of Venezuela operations and the layoff of the workforce. More than 1,200 employees of the plant in the industrial city of Valencia will receive severance packages along with 10 tires each.
Venezuela has been plagued with severe economic crisis for long. Due to hyperinflation in the Latin American country, it is economically unable to carry out business activities in local currency. Many global biggies are abandoning operations in the country, scaling back or holding out for better days.
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 Venezuela plant manufactured some 1,000 tires per day. But inadequate supply of materials and growing costs compelled the company to decide on shutting the plant.
In the past six months, shares of Goodyear have underperformed the industry it belongs to. Shares of the company have declined 14.2% compared with the industry’s fall of 7.1%.
Currently, Goodyear carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the auto space are Allison Transmission Holdings, Inc (NYSE:ALSN) , Fox Factory Holding Corp (NASDAQ:FOXF) and America’s Car-Mart, Inc (NASDAQ:CRMT) . While Allison Transmission and Fox Factory currently sport a Zacks Rank #1 (Strong Buy), America’s Car-Mart carries a Zacks Rank #2 (Buy). You can see Zacks Investment Research
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