Keegan Plays It Cool

In his first public speech about the problems facing Goodyear, CEO Robert Keegan told an audience of 1,000 independent tyre dealers that he had no grand plan or complicated strategy to turn the company round. This came as a surprise to some observers, who had predicted that the company would make more swingeing cuts, or introduce some radical restructuring plan.Keegan’s idea is deceptively simple; Goodyear, he said, needs to listen harder to its customers, make decisions quicker, eliminate bureaucracy, keep a lid on costs and produce products of the highest quality.

If it succeeds at achieving these fundamental targets, then the company will be back on track. He spoke of 2002 as “one of the toughest in the history of our company”, blaming a soft market while admitting that Goodyear had made mistakes in its strategy and in the way it did business. The time has come, he said, for Goodyear to work more closely with its many independent tyre dealer customers in a concerted effort to win back lost market share.

It was not spelled out how this would be done, but Goodyear has said that it wants to simplify the way it deals with customers, making it easier for them to do business with the company by minimising paperwork and using the latest technology to help dealers source hard-to-find tyres for customers.Since officially taking the reins a month or so ago, Keegan has taken steps to get Goodyear back on to an even keel, cutting 700 jobs, renegotiating loans and lines of credit and not paying a quarterly dividend. There was just a hint in his speech that there may be more upheaval to come when he told the meeting that “2003 will be a year of changes – big changes” although he did not specify what these changes would entail.

In essence, Keegan’s speech was a rallying call to the independent dealers to get behind the corporation in its hour of need, promising then that Goodyear would listen to their complaints and try to solve their problems.It is estimated that two-thirds of US replacement tyres are sold by the independent sector, so their importance to companies such as Goodyear cannot be over-emphasised. Keegan obviously shares this view, as he told the audience: “Our primary goal is to help you build your businesses – that’s how we’ll build our comeback, our success.

Our plan is not about Wall Street, although we love our investors. It’s not about consumers and end users. It’s about you.

If you win, we win.”According to the Akron Beacon Journal, Keegan’s speech was generally well received by the dealers, who realise that Goodyear needs their help as it finds itself in dire straits. No doubt some of the enthusiasm is due to patriotism in these difficult times, but comments from dealers of “Goodyear has done a lot of things for us in the past.

Now we have to pull together like a family” and “I’m going to sell more tyres and buy some Goodyear stock” seem to indicate that there is a willingness to give Keegan a chance and that the dealers want Goodyear to come through this difficult period. From the reactions, it seems that Keegan can obviously talk the talk, but now is the time to deliver – after all, Goodyear has been making promises for some time – and now the dealers are waiting to see if he can walk the walk..