Goodyear Tire and Rubber cuts jobs, eliminates dividend. (Corporate, financial news).

Goodyear Tire & Rubber, Akron, OH, announced restructuring actions in its corporate headquarters and North American tire organizations that will result in the elimination of more than 700 salaried staff positions. The actions were taken as part of an ongoing program to improve the company's fixed-cost structure. Of the total, nearly 500 ,jobs will be eliminated through layoffs, including 350 in Akron. The remaining layoffs will be distributed across the corporation's other North American locations. Approximately 200 of the job eliminations have been achieved through attrition since the beginning of the fourth quarter of 2002. Separately, the company announced that 34 hourly positions at its Akron Technical Center will be eliminated. The actions, for which the company will take a pre-tax charge of approximately $75 million, are expected to result in annualized savings totaling $80 million, of which $75 million is expected to be achieved during 2003. Goodyear's board of directors also approved the elimination of the company's quarterly dividend. The dividend decision represents an expected annualized cash flow benefit of approximately $84 million, compared to the previous 12 cents per share dividend rate. This means that investors will not receive a quarterly dividend check for the first time since 1937. As part of its plan to enhance the company's financial flexibility, Goodyear is engaged in meetings with representatives of its principal bank lenders about modifying certain loan agreements, including covenants within those agreements. The lenders have granted Goodyear waivers until March 7 to comply with certain covenants that would have required the company to contribute approximately $500 million to its pension plans in excess of federally mandated requirements. The covenants also would have required the company to maintain a minimum net worth, which could be impacted by non-cash adjustments for minimum pension provisions and/or a valuation allowance related to domestic deferred tax assets. According to a company newsletter distributed to employees, Goodyear plans to idle 15% of its North American tire-making capacity this year and shill production of some tires to low-cost countries.