Shortages from Thailand's catastrophic flooding earlier this year could spread to the market for aircraft tires as soon as February or March, Goodyear Tire & Rubber Co. (GT) said Friday.
The looming supply squeeze represents a setback for yet another industry after heavy rains swamped many manufacturing plants around Thailand's industrial heart in October. Damage to key factories has already pushed up prices for hard-disk drives and auto parts.
On Friday, Goodyear said its main aviation-tire plant in Bangkok was also hit by the floods, forcing it to idle the facility earlier this year. The tire maker has remained in frequent contact with customers but still predicted a global shortage of bias aviation tires could affect the commercial-airline industry earlier next year.
The company said it couldn't accurately assess the disaster's impact on the aircraft-tire market until the floodwaters had receded during the last week of November.
Goodyear said it is now looking for other viable supply sources for its customers and is also asking other aviation-tire manufacturers to help mitigate the disruption.
The company, meanwhile, has ramped up its production of new tires and retreading at its other factories in Arizona, Georgia, Virginia and the Netherlands.
Goodyear recently reported its third consecutive quarterly profit as it held the line on higher rubber costs while benefiting from sales of premium-priced tires in the U.S. and a surge of winter-tire orders in Europe.
Shares closed at $14.55 and were lightly traded after hours. The stock has climbed 35% over the past three months.
Goodyear: Thai Floods Could Hit Market For Airplane Tires
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AP) AKRON, Ohio — Goodyear Tire & Rubber Co. said Friday that there could be a shortage in tires for commercial jets as early as February because operations at its main manufacturing plant in Thailand have been disrupted by flooding.
Starting in late July, Thailand was hit by its worst flooding in more than a century. The floodwaters that idled Goodyear's plant receded only in the last week of November.
The floods left hundreds dead, destroyed millions of tons of crops and disrupted industrial production, including manufacturing operations at Goodyear's aviation tire facility in Bangkok.
Goodyear said it expects a global shortage in aviation tires by February or March. It has increased production at other plants and is pursuing other potential supplies.
The company is working to bring its Thai plant back to full production as soon as possible but noted delays could result from the condition of its equipment, availability of materials and other factors.
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