Goodyear decrease in net income

Despite Goodyear’s increased turnover in sales the world’s biggest manufacturer of tyres suffered a sharp decline in net turnover last year. Turnover for 1999 was US$12.9 billion compared with US$12.

6 billion in 1998. At the same time net income went down from US$682.3 million (1998) to US$241.

1 million in 1999. Goodyear president, Gibara, said this result was disappointing but claimed that Goodyear had already started work to improve the situation and expected turnover for each quarter in 2000 to be better than 1999. This expectation is based on the fact that the situation in Latin America and Asian emerging countries will improve and the advantage of the joint venture with Dunlop will bear fruits because with ongoing integration there will be bigger synergies.

Goodyear had problems with its North American home market in 1999 and could not reach the necessary fill rates. The Gadseen plant was closed and then forced to re-open because demand for the OE market was higher than expected. The OE business turnover was up but only with poor margins.

Although Gibara called the results disappointing, analysts had expected the results to be much worse. There is reason to believe that Goodyear share prices will improve step by step..