Goodyear to Cut Jobs, May Trim Auto Maker Sales

Goodyear Tire & Rubber Co., North America’s largest tire maker, plans to cut 3,500 jobs and may reduce sales to auto makers after a fourth-quarter loss of $174 million gave the company its first annual loss in nine years.

Most of the loss came from costs in the latest period to cut jobs and replace about 200,000 truck tires. Goodyear, which had 96,000 employees, is eliminating jobs in Europe, Asia and Australia this year.

Goodyear also said sales to auto makers such as General Motors Corp. and Ford Motor Co. may be reduced by about 25% over three years because of declining profit margins.

Goodyear sells about 30% of its tires to manufacturers, often at a loss because auto makers demand lower prices from suppliers.

Shares of the tire maker rose $2.06, or 9.6%, to $23.46 on the New York Stock Exchange on expectations the company will benefit from the cost cutting. The stock had dropped 17% in the last year.

Goodyear’s loss for the year was $203.6 million, or $1.27 a share, compared with net income of $40.3 million, or 25 cents a share, in 2000, the company said.

The fourth-quarter loss widened to $174 million, or $1.07 a share, from $102 million, or 65 cents a share, a year earlier. Sales for the period dropped 1.5% to $3.47 billion.

Akron, Ohio-based Goodyear didn’t benefit as much as expected from Bridgestone Corp.’s Firestone tire-safety recalls.