Goodyear Shares Slump

Following Goodyear’s announcements yesterday concerning the company’s closure of its Melbourne plant and its plans to invest further in Brazil and China and to refurbish four of its American facilities, NYSE shares in the organisation fell by a steep 11.2 per cent. The drop sees the company’s stocks fall to their lowest value since December 2006.

Reports suggest that the dip has been caused by a variety of factors compounded by the manufacturer’s strategic announcements. The decline in the market for replacement tyres, especially within the heavy vehicle sector, and perpetually rising fuel and raw material costs have led both to Goodyear’s aggressive – and developing-market regarding – approach and the company’s slump in the stock market.

Analysts have suggested that Goodyear is taking the necessary steps to develop its business and to safeguard itself against a North American market currently in a state of flux. Rich Kramer, Chief of Goodyear North America, concurred telling news sources that, “The tough economy and reduced tire demand and production will clearly put pressure on our earnings and, consequently, the timing of when we reach our 5 percent operating margin goal. Goodyear is much better prepared to endure economic volatility today than during the last economic downturn.”