A more financially secure Goodyear Tire & Rubber Co. intends to build its first tire plant in the Americas since 1990 as well as increase its dividend, pay down debt and buy back stock.

The Akron tire maker says it hasn’t decided where the projected $500 million “high-value-added tire” factory will be built — someplace from “Canada to Chile,” said spokesman Keith Price. An internal site selection committee will decide no later than the first quarter of 2015, with the plant expected to start making tires in 2017.

“It’s really premature to speculate about any location,” Price said. It is likely that governments will be contacting Goodyear to seek the new factory, he said.

The new factory initially will build about 6 million consumer tires annually for the North and South American markets with the ability to add capacity, Goodyear said Thursday.

Goodyear will invest $350 million in its other tire factories to boost production of so-called high-value-added tires by another 6 million a year by 2019. Consumer demand for those kinds of premium tires is expected to grow, the company said.

Other tire makers have also announced, or are building, new factories in North America.

Goodyear announced it will be able to reallocate about $1.1 billion from 2014 to 2016 to invest in its factories and more because it was able to use cash to fully fund its U.S. hourly employee pension plan earlier this year. That freed up cash for Goodyear to reinvest elsewhere.

Looking forward

Chief Financial Officer Laura Thompson discussed the latest plans at the KeyBanc Capital Markets Industrial Automotive and Transportation Conference in Boston.

Besides the new factory investments, plans include:

•?Increasing the quarterly dividend by 20 percent to 6 cents per share from 5 cents per share beginning in September. Goodyear reinstated its dividend last year. The new payout is an annual rate of 24 cents per share starting in 2015 and 22 cents per share this year.

•?Increasing a share repurchase program by $350 million to allow the company to buy up to $450 million of its stock through 2016. The stock purchase program can be increased by another $250 million.

•?Spending $400 million to reduce debt and help Goodyear get an investment grade credit rating.

Shareholders shrugged off the announcements as Goodyear stock dropped 16 cents to $26. Shares are up 9.5 percent since Jan. 1 and are up 71.2 percent from a year ago.

“This updated capital allocation plan for 2014-2016 reflects Goodyear’s commitment to balancing all our priorities, returning cash to shareholders, investing in high-return growth projects and achieving investment grade metrics, to drive long-term shareholder value consistent with our articulated strategy,” Richard J. Kramer, chairman and chief executive officer, said in a statement.

The new tire factory will be Goodyear’s most technologically advanced one. Goodyear declined to specify what kind of tire technology it will put into the plant.

Goodyear loosely defines high-value-added tires as ones that have premium features, compounds and designs and command higher retail prices — and which are much more profitable than lower-end commodity tires. Goodyear years ago changed strategies to emphasize the sale of the more profitable tires.

Goodyear declined to comment on whether it has discussed its new factory plans with the United Steelworkers, which represents hourly workers at most of its North American facilities.

The new plant will not be one of the largest Goodyear has in terms of capacity, Price said. For instance, the company’s Lawton, Okla., plant produces about 22 million tires annually.

Goodyear last built a tire factory in the Americas in 1990, when it opened a plant in Ontario, Canada. Its newest factory opened in 2011 in China to serve markets there.

‘Growing again’

“This is pretty exciting,” said David Zielasko, editor and vice president/publisher of trade magazine Tire Business. “I think they have taken the necessary steps to get a strong balance sheet. ... It looks like they are ready to start growing again.”

Tire Business wrote last month that other tire companies have announced major plant expansions and groundbreakings in recent years in North America.

For the fiscal year ending in August 2012, tire makers set aside $2.75 billion for North American projects, the magazine reported. Another $1.8 billion in planned expenditures was announced in 2013, the magazine reported last month.

“Everybody’s kind of been spending,” Zielasko said.

Tire Business reported that the most recent U.S. tire factory projects include:

•?Continental Tire opening a $500 million factory last year in Sumter, S.C.

•?Bridgestone Americas spending about $1.2 billion in Aiken, S.C.

•?Yokohama Tire Corp. building a $300 million factory in West Point, Miss.

•?Michelin starting a new plant in Starr, S.C., part of a $750 million expansion project.

•?Toyo Tire expanding its White, Ga., factory.

•?Hankook Tire planning to break ground on a tire factory this year in Tennessee.

•?Kumho Tire resurrecting plans to build a factory in Georgia.

“Plants have tended to be more down South,” Zielasko said. “It used to be companies were chasing the lowest labor costs. Now, they want to save on logistics. ... I think companies are locating now where it makes the most sense logistically.”

Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com