Goodyear appoints 3 Elliott-approved directors, begins operational review

The open letter that Elliott Investment Management L.P. sent to The Goodyear Tire & Rubber Company on 11 May 2023 was met with a promise to review the shareholder’s recommendations, which included the initiation of an operational review and the appointment of “five new highly qualified independent directors.” While Goodyear hasn’t met this wish list in its entirety, today the company announced three additions to its Board of Directors in connection with a cooperation agreement with Elliott.

The following business leaders, mutually agreed upon by Goodyear and Elliott, will join the Board effective immediately:

• Joseph R. Hinrichs, President & CEO, CSX Corporation
• Max H. Mitchell, President & CEO, Crane Company
• Roger J. Wood, Former Co-CEO, Tenneco

With these appointments, the Goodyear Board is composed of 15 directors, 13 of whom are independent. Goodyear will nominate up to 12 directors to stand for election at its 2024 annual meeting, including the three new directors.

Committee to oversee review

Further, as part of its agreement with Elliott, the Board is establishing a Strategic and Operational Review Committee to oversee and support the Board and management’s review of various strategic and operational alternatives to maximise sustainable shareholder-value creation and build upon a number of initiatives that Goodyear has been executing. The committee will be chaired by Richard Kramer, chairman, chief executive officer and president of Goodyear, and will include James A. Firestone, Thomas L. Williams, Max H. Mitchell and Roger J. Wood. The committee reviews will be supported by Goodyear’s financial advisors and a leading consulting firm.

Thoughtful & ongoing Board refreshment

“We are pleased that our constructive dialogue with Elliott has culminated in the appointment of three, high-quality, independent directors,” says Kramer. “Goodyear is committed to thoughtful and ongoing Board refreshment to ensure we have directors in place with relevant expertise and diverse perspectives to oversee our business today and into the future. We look forward to benefitting from the deep knowledge and experience Joe, Max and Roger bring to our Board as we continue to focus on creating sustained shareholder value.”

“We are pleased to have collaborated with Rich and the Board on the formation of the Strategic and Operational Review Committee and the addition of three new independent directors to Goodyear’s Board,” state Elliott senior portfolio manager Marc Steinberg and portfolio manager Austin Camporin. “Goodyear is an iconic brand and business that is well-positioned to benefit from industry tailwinds. We have been encouraged by Goodyear’s openness to taking actions necessary to realise its full potential, and we are confident that our agreement enhances governance at Goodyear and ensures that the company will remain focused on long-term shareholder-value creation.”

Legal details

The cooperation agreement that Goodyear has entered into with Elliott contains customary standstill, voting, non-disparagement and other provisions. A complete copy of the cooperation agreement will be filed on Form 8-K with the U.S. Securities and Exchange Commission.

Evercore, Lazard and Goldman Sachs are serving as financial advisors to Goodyear, and Paul Weiss is serving as legal counsel.

Further coverage

The June 2023 issue of Tyres & Accessories magazine contains 12 pages of in-depth reportage and analysis into the issues now being broached by Goodyear and Elliott. Follow further developments here on Tyrepress.com.

Director biographies

Goodyear Tire & Rubber has published the following biographies of its new directors:

About Joseph R. Hinrichs

Joseph R. Hinrichs is currently President & CEO of CSX Corporation (Nasdaq: CSX) (“CSX”), a leading supplier of rail-based freight transportation in North America.

Prior to joining CSX in 2022, Mr. Hinrichs served as President of Ford Motor Company’s (NYSE: F) (“Ford”) global automotive business, where he led its $160-billion automotive operations. As part of this role, he oversaw Ford’s global business units and the Ford and Lincoln brands, as well as leading all of Ford’s automotive skill teams across numerous verticals, including Product Development, Purchasing, Manufacturing, Labor Affairs, Marketing and Sales, Government Affairs, Information Technology, and Sustainability, Safety and Environmental Engineering. During his tenure at Ford, Mr. Hinrichs also served as EVP & President of Global Operations, EVP & President of the Americas, President of Asia Pacific and Africa, Chairman & CEO of Ford China, and President & CEO of Ford Motor Company, Canada Ltd.

Mr. Hinrichs brings more than 30 years of experience in the global automotive, manufacturing, and energy sectors to the Goodyear Board. He brings an unwavering commitment to operational excellence, extensive experience building global businesses through investment in people and culture, and a deep understanding of balancing safety and efficiency.

About Max H. Mitchell

Max H. Mitchell is currently President & CEO of Crane Company (NYSE: CR) (“Crane”), a leading manufacturer of highly engineered components for challenging, mission-critical applications focused on the aerospace, defense, space and process industry end markets. Mr. Mitchell was appointed to his current position in 2014.

Mr. Mitchell has also held positions at Crane including Executive Vice President & Chief Operating Officer, President, Fluid Handling Group and Vice President of Operational Excellence for Crane NXT. He joined Crane in 2004. His prior experience also includes Senior Vice President of Global Operations at Pentair Tool Group from 2001 to 2004, as well as Vice President of Danaher Corporation (NYSE: DHR) from 1996 to 2001.

Mr. Mitchell’s expertise includes developing and driving corporate strategy and optimizing portfolio results, extensive knowledge of, and experience with, the global end markets, broad international and domestic M&A expertise and driving a performance-based culture.

Mr. Mitchell serves on the Board of Directors for Crane and Crane NXT (NYSE: CXT).

About Roger J. Wood

Roger J. Wood served as Co-CEO of Tenneco, Inc., one of the world’s leading designers, manufacturers and marketers of automotive products for original equipment and aftermarket customers, from 2018 to 2020.

Mr. Wood previously served as Chairman & CEO of Fallbrook Technologies, having joined in April 2018. He also served as President & Chief Executive Officer of Dana Holding Corporation (NYSE: DAN) (“Dana”), a leading global supplier of highly engineered driveline, sealing and thermal management technologies serving the light vehicle, commercial truck and off-highway equipment markets. He joined Dana after a 26-year career with BorgWarner Incorporated (NYSE: BWA), a global product leader in delivering innovative and sustainable mobility solutions, serving most recently as executive vice president and group president for the engine group.

Mr. Wood brings more than three decades of industry leadership and expertise in global operations, and also serves on the Board of Directors for PHINIA Incorporated (NYSE: PHIN) and Brunswick Corporation (NYSE: BC).