Goodyear Tire & Rubber Co. (GT) said Friday it will shut its Philippines tire plant as auto maker cutbacks combined with consumers who are driving less continue to push demand to historic lows around the world.

The largest North American tire maker said the closure will result in an 83% cut in staff in the country. The move is part of Goodyear's February plan to slash tire production by between 15 million and 25 million over the next two years.

The Philippines closure, combined with Goodyear's May announcement of plans to end production in Amiens, France, would result in a production cut of about 8 million tires.

Goodyear spokesman Keith Price said the Philippines plant was high in cost relative to the company's other Asia-Pacific plants. Production is being transferred to lower-cost plants in the region, Price said. Goodyear traditionally produces tires in the regions they are used.

Bankruptcies and plant closures by General Motors Co. and Chrysler Group LLC have slashed tire demand this year. Industry tire shipments to auto makers in the U.S. fell 56% alone in June, compared with June 2008.

Consumer sales, traditionally relied on to offset auto maker cutbacks, are running at three-year lows as people drive less and delay purchasing new tires, according to JPMorgan analyst Himansuh Patel.

Worldwide tire output is expected to drop by 20% to 52.5 million tires this year, Patel said in a report earlier this week. Meanwhile, demand is tracking to fall to levels not seen since 1993.

Goodyear is not alone in its plant shutdowns. Companies such as Cooper Tire & Rubber Co. (CTB), Continental AG (CON.XE), Michelin, Bridgestone Corp. (5108.TO) and Pirelli have announced a total of seven closures in the U.S. and Western Europe in the last six months.

Price had no comment on what other plants may be targeted for cuts. However, in the U.S., the Union City, Tenn., plant is the most vulnerable to a potential closure after the United Steelworkers agreed to "unprotect" the plant from possible closure. None of the company's other U.S. plants have unprotected status. Production at Union City was shifted from a continuous operating schedule to a five-day, three-shift operation on July 6. The plant produced about 12 million tires and employed about 2,300 workers before the July 6 change.

Goodyear will record about $20 million in charges associated with the Philippines closure in the third quarter, most for noncash asset write-offs.

The Philippines closing will be completed by the end of the current quarter, and about 500 of the company's 600 employees will lose their jobs. Sales and marketing operations in the country won't be affected. The facility opened in 1956.

Goodyear closed high-cost plants in six countries, eliminating the production of 25 million tires, between 2005 and 2008. The company has also shed more than 9,000 jobs since the middle of last year.

Goodyear will report its second-quarter earnings July 30. The shares rose 30 cents, or 2.4%, to $12.91 in recent trading.

-By Jeff Bennett, Dow Jones Newswires; 248-204-5542; jeff.bennett@dowjones.com