Sumitomo Rubber Industries to Cease Production and Dissolve U.S. Subsidiary SRUSA

Sumitomo Rubber Industries, Ltd. (the "Company") announced on November 7, 2024, that it has decided to cease all production activities at its subsidiary, Sumitomo Rubber USA, LLC (SRUSA), and dissolve the company following the necessary preparations.

In October 2015, Sumitomo Rubber acquired 100% of the shares of Goodyear Dunlop Tires North America, Ltd. (now SRUSA) after dissolving a joint venture with The Goodyear Tire & Rubber Company. This move was intended to strengthen the Company's position in the North American market. Since then, SRUSA has been producing tires for various vehicles, including passenger cars, motorcycles, trucks, and buses. However, despite efforts to improve production efficiency and operational performance, SRUSA has faced persistent challenges in profitability and productivity. These issues made long-term profitability unlikely, prompting Sumitomo Rubber to reconsider its strategy in North America.

After thorough deliberation, the Company concluded that the sale of tires manufactured at SRUSA’s facility would not be profitable. As a result, Sumitomo Rubber has decided to terminate production at SRUSA and dissolve the subsidiary. Research and development activities previously conducted at SRUSA will be transferred to SRI America, which will continue operations in North America. Additionally, the sales structure of Sumitomo Rubber North America, Inc., another subsidiary, will remain unchanged.

The Company views the period up to 2025 as a phase of focusing on its core businesses under its current Mid-Term Plan. The goal is to direct resources toward areas of growth to ensure the future success of the Group.

The resolution to terminate all production activities at SRUSA and dissolve the company was made on November 7, 2024. The necessary procedures for dissolution will proceed in accordance with local laws and regulations.

The dissolution will result in a loss of 46.5 billion yen related to structural reforms 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, estimated costs for layoffs and early termination penalties, amounting to approximately 28.2 billion yen, are expected to be recorded in the fourth quarter of the fiscal year ending December 31, 2024. These figures are still being reviewed, and any significant changes will be disclosed promptly.

Sumitomo Rubber will continue the necessary steps for SRUSA's dissolution in compliance with local regulations. The Company is closely monitoring the financial impact of the termination and will update its consolidated financial results for the fiscal year ending December 31, 2024, as needed. Any relevant disclosures will be made in due course.