Sumitomo Rubber's US subsidiary suffers heavy losses and announces dissolution!

Sumitomo Rubber Industries, Ltd. announced on November 7 that it has decided to stop all production activities of its subsidiary Sumitomo Rubber America, LLC (hereinafter referred to as SRUSA) and dissolve the company after making necessary preparations.

In October 2015, Sumitomo Rubber dissolved its joint venture with Goodyear Tire & Rubber Company and acquired 100% of the latter's North American company, changing its name to SRUSA. The move is aimed at strengthening the company's position in the North American market. Since then, SRUSA has been producing tires for various vehicles such as passenger cars, motorcycles, trucks and buses. However, despite efforts to improve production efficiency and operational performance, SRUSA continues to face ongoing challenges in profitability and productivity. These problems have made it difficult for the company to make profits in the long term, which has led to it reconsidering its strategy in North America.

Ultimately, the group decided to terminate SRUSA's production and dissolve the subsidiary. The research and development activities previously conducted at SRUSA will be transferred to SRI America, which will continue to conduct business in North America. In addition, the sales structure of another subsidiary, Sumitomo Rubber North America, Ltd., will remain unchanged.

The company regards 2025 as an important stage for focusing on core businesses under its medium-term plan, with the goal of investing resources in growth areas to ensure the future success of the group.

The decision to terminate all production activities of SRUSA and dissolve the company was made on November 7, 2024, and the procedures required for dissolution will be carried out in accordance with local laws and regulations.

The dissolution will result in a loss of 46.5 billion yen related to the structural reform in North America, which will be recorded as an expense in the company's consolidated financial results for the nine months ending September 30, 2024. In addition, the estimated cost of layoffs and early termination penalties of approximately 28.2 billion yen will be recorded in the fourth quarter of the fiscal year ending December 31, 2024.