For sale: Kicking the tires of Lincoln's Goodyear plant
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By RODD CAYTON/Lincoln Journal Star
As Goodyear shops its engineered products division, potential buyers would see in Lincoln a plant that has been upgraded over the years.
According to the United Steelworkers of America, which represents hourly workers at the belt-and-hose plant in northeast Lincoln, the company hasn’t made enough investment to keep the plant as modern as it could be.
“From the international’s perspective,” said spokesman Wayne Ranick in Pittsburgh, “I’d say that while the company has made investments, it hasn’t been enough and they’ve been less than judicious in investing in the right product lines.”
Goodyear, Ranick said, has increased its investment in Lincoln over the last couple of years, a move he describes as “an attempt to catch up” on modernity the plant hasn’t gotten in the past.
In the early 1990s, for example, then-congressman Doug Bereuter visited the plant; in 2002 he told the Journal Star he had been “appalled” by how obsolete the production equipment was at the time.
“Goodyear was starving the plant,” he said.
Plant worker Paul Earnest, who has been at Goodyear 18 years, said of late the company has phased out some old machinery and removed some obsolete equipment such as heaters used to cure airplane tires. That, Earnest said, has meant that workers in several departments are less cramped than before.
He said the union has been concerned over the last 8 to 12 years — that the company would have to put money into the plant to make it competitive.
For its part, Goodyear spokesman Skip Scherer said, the company has made investments in the Lincoln plant over the years, but he would not disclose the total amount of money invested, nor the extent to which the plant has been modernized, citing competitive reasons.
“Investments in facilities are only part of the equation to a competitive working environment,” he said. “We continue to work with all of our plants in the interest of competitiveness and competitive realities.”
The Lancaster County assessor says the taxable value of equipment at the plant, 4021 North 56th St., has fallen from $10.9 million in 2000 to $4.45 million last year. Assessor Norm Agena said state statute requires that production equipment, taxed as personal property, depreciate to zero taxable value over five to seven years.
The slide in overall taxable value, then, means that new equipment isn't being added at a high enough frequency to offset depreciation.
The last two building permits granted for the plant allowed unspecified improvements in 2002 and 2004, according to the city building and safety department. Building permits are not required for some improvements, such as replacing old production equipment with new, according to the department.
The Lincoln plant, Ranick said, is somewhere in the middle when assessing the modernity of the company’s 17 engineered products plants in the United States, Mexico and Canada.
(Goodyear came to Lincoln in 1943 to take over an Arrow Aircraft plant that dates at least as early as 1927.)
Gary Schaefer, vice president of Steelworkers Local 286, said the company has, over the last few years, sent about one-third of new investment in the engineered products division into the Lincoln plant. Schaefer said he’s unaware how much that total investment might be.
The company is making strides toward keeping the plant competitive, said Schaefer.
Schaefer said he couldn’t say how useful a buyer of Goodyear Engineered Products would find the Lincoln plant. But, he said, health and safety upgrades and machinery replacement have given the plant a chance to shine for Goodyear.
“If they keep making improvements and we keep seeing the productivity gains we’ve been seeing, this is a very viable plant for Goodyear,” he said.
The Lancaster County assessor’s office values the plant and the land it sits on at about $9.6 million.
That’s not necessarily what a buyer would pay for it, said industrial broker Steven Reeder of CB Richard Ellis/Mega.
“It is very difficult to put a value on large manufacturing type plants in Iowa and Nebraska,” Reeder said.
One reason for that, he said, is the lack of comparable sales data.
“While it might be easy in residential (real estate) to find numerous 1,500-square foot, split-entry homes that have sold in a particular area,” he said. “It can be difficult to find another plant similar to the Goodyear plant that has sold in all of eastern Nebraska and western Iowa.”
Further complicating the true value of the plant is a cool Eastern Nebraska industrial market, Reeder said, along with its size — the plant takes up more than a million square feet.
One assessment that’s not available is that of Continental AG, which said last month that it wanted to investigate buying Goodyear Engineered Products to give its ContiTech subsidiary a larger North American presence.
There are no new developments on whether Continental will buy the unit, spokesman Hannes Boekhoff said.
Denver-Based Gates Corp. was identified by Earnest as another potential suitor. But Gates spokeswoman Meg Vanderlaan said the company has no information to offer on a possible Goodyear Engineered Products purchase.
Reach Rodd Cayton at 473-7107 or rcayton@journalstar.com.
The plants
Locations of Goodyear Engineered Products plants in North America with a description of the products made at each:
United States
Spring Hope, N.C.; conveyor belts
Hannibal, Mo.; hose
Lincoln; power transmission belts
Marysville, Ohio; conveyor belts
St Marys Ohio; rubber track
Norfolk; hose
Sun Prairie, Wis.; hose
Mt Pleasant, Iowa; hose
Canada
Bowmanville, Ontario; conveyor belts
Collingwood, Ontario; hose
Granford, Quebec; hose
Owen Sound, Ontario; power transmission belts
Quebec City, Quebec; molded products
Mexico
Chihuahua (two plants); power tranmission belts, molded products
Delicias; hose;
San Luis Potosi; air springs
Source: Goodyear Tire & Rubber Co.
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