Goodyear Tire says fire damaged portion of Debica manufacturing facility

According to a regulatory filing, Goodyear Tire said that, on August 20, 2023, a fire significantly damaged a portion of the tire curing area and caused the temporary shutdown of our tire manufacturing facility in Debica, Poland. Tire production at Debica resumed on August 22, 2023 at approximately 55% of capacity. The facility is currently operating at approximately 70% of capacity and a full ramp-up is not expected until the fourth quarter of 2024 due to the lead time to replace the damaged equipment. “We are mitigating the impact on our customers by leveraging existing inventory and by increasing production at other facilities, which should help to offset lost production until Debica returns to full production,” the company said. “Europe, Middle East and Africa consumer sales are expected to be negatively impacted by $20M to $25M in the third quarter of 2023 and $10M to $15M in the fourth quarter of 2023 due to the shutdown and limited production capacity at Debica. The related lost sales margin, as well as unabsorbed fixed costs and other period expenses, resulting from the shut-down and subsequent ramp-up period are expected to negatively impact EMEA’s operating income by $10M to $15M in both the third quarter of 2023 and the fourth quarter of 2023. We will provide an estimated impact to 2024 after we have confirmed the restoration schedule. We maintain third-party insurance with a $15M per occurrence deductible that covers property damage, cleanup expenses and qualifying business interruption impacts. We will reach the deductible limit and expense $15M in the third quarter of 2023 related to property damage and clean-up expenses. We expect that a significant portion of the business interruption impacts will be reimbursed by our insurance. However, due to uncertainty in determining the ultimate amount and timing of business interruption coverage that could be available to us, we did not reflect potential insurance reimbursement for business interruption in the above sales and operating income estimates for EMEA nor have we recognized a business interruption insurance receivable at this time. Consistent with past practice, we will record a receivable related to business interruption insurance once the claim is substantially complete.”