Goodyear Tire & Rubber shares traded higher Wednesday after the company announced a plan to reduce leverage and costs.
(ticker: GT) said the cost cuts, which will involve adjustments to its overall footprint, and through optimizing its factories, which will lead to an annual, run-rate benefit of $1 billion by the end of 2025.
Goodyear also said it was exploring strategic alternatives for its chemical business, the Dunlop brand and the off-the-road equipment tire business.
Goodyear plans a debt reduction of about $1.5 billion, factoring in about $1.1 billion allocated for restructuring purposes, a move that it estimates will bring its debt close to investment-grade credit rating.
“Our transformation plan represents a clear path to create a more profitable and focused Goodyear,” said Goodyear CEO Richard Kramer, referring to what the company called its “Goodyear Forward” plan.
In a separate press release, the company also announced Kramer’s plans to retire next year. The Goodyear board has retained an executive search firm to find a new chief executive.
Goodyear has conference call scheduled for 8:30 am Eastern time.
The stock rose 9.8% to $15 in premarket trading Wednesday.
Write to Karishma Vanjani at [email protected].