AKRON, Ohio (AP) - With its stock price still down and its competitive pressures rising, Goodyear Tire & Rubber Co. is seeking ways to cut costs, with job cuts as a strong possibility.
"We have not announced anything," company spokesman Keith Price said Tuesday about whether layoffs may soon occur.
Chief Executive Officer Robert Keegan sent a letter to 95,000 worldwide employees last week, saying that the company may try to cut costs with job cuts, reduced production or a shift of production to low-cost facilities.
"Last week, that was not a new piece of information. We have been talking about the need to reduce costs for a while," Price said.
Analysts have been slashing estimates for Goodyear's earnings and predict the company will at best break even for the year. They said serious action to cut costs, such as eliminating jobs, is necessary and expected.
Goodyear's stock price has in the past few years plunged 75 percent to values not seen since 1990. Goodyear shares rose 13 cents to close Tuesday at $7.27 on the New York Stock Exchange.
"We don't want to see anyone lose their job -- it hurts whether they work in the offices or on the factory floor," said Doug Werstler, president of United Steelworkers of America Local 2 in Akron. "Obviously, most of the workers are concerned."
For the first nine months of 2002, Goodyear lost $600,000, or less than half a cent per share, compared with a net loss of $29.6 million, or 19 cents a share, the year before.
"I think there will be some meaningful moves to reduce costs, which would include people," said analyst Saul Ludwig of McDonald Investments in Cleveland.
Analyst Saul Rubin of UBS Warburg agreed.
"It makes sense; they need to reduce their head count," he said. "Their business is getting gradually smaller and their costs are too high. The environment is quite competitive. They've been losing market share for a number of years."
Rubin said he would expect any jobs cuts to be announced next month when the company releases its 2002 financial results.