DETROIT -(Dow Jones)- Goodyear Tire & Rubber Co. (NYSE:GT) (GT), North America's largest tire maker, plans to invest more than $2 billion over the next five years to expand and modernize its plants both in the U.S. and around the world as it looks to boost production of high-end products and output in low-cost countries.
The company said it will spend as much as $700 million to improve four U.S. plants so it can increase the production of its more-lucrative high-end tires traditionally purchased by luxury car and crossover vehicle owners. Goodyear also will spend a total of $1.6 billion to expand production in China, Brazil, Chile, Poland and Germany.
Goodyear has spent the last three years revamping its operations and changing its focus as it attempts to cut costs while tapping larger revenue sources amid spiking raw material costs and intensified competition from companies such as Bridgestone Corp.
"Going forward, we anticipate capital investments totaling between $1 billion and $1.3 billion per year from 2008 to 2010," Goodyear Chief Executive Robert Keegan said in a statement. "Our plans, however, are flexible so that we can adjust both the pace and amount to reflect the macro-environment and market trends while maintaining positive cash flow."
Further details of Goodyear's plans are expected to be discussed during an investor presentation in New York slated to start at 9 a.m. EDT.
-By Jeff Bennett, Dow Jones Newswires; 248-204-5542; jeff.bennett@dowjones.com
(END) Dow Jones Newswires 06-26-08 0716 Copyright (c) 2008 Dow Jones & Company, Inc.
