Founded in 1898 by Frank Seiberling, The Goodyear Tire & Rubber Company is an American multinational tyre manufacturing company based in Akron, Ohio. It is one of the oldest, biggest and best-known tyremakers in the world. Goodyear makes tyres for automobiles, commercial trucks, light trucks, motorcycles, SUVs, racing cars, aeroplanes, farm equipment and heavy earth-mover machinery. Find all the news and analysis you need relating to Goodyear here.
In the USA, Goodyear is defending a product liability lawsuit brought against the company by former customer Heatway Systems. Heatway alleges that Goodyear supplied it with millions of dollars worth of defective hoses, used in heating systems for buildings, which caused up to $2 bn of damage. Heatway has already paid $6.5 m to settle 119 claims.
Following an increase in turnover from US$ 3 billion to US$ 3.5 billion, which incorporates US$ 577 from acquired Dunlop activities, Goodyear has reported a net income of US$ 63.6 million for the first quarter of 2000. The company sold 54.8 million tyres during this period, which is 9.1million more than in the corresponding quarter last year. 8.9 million of this total were manufactured by Dunlop. And as result of this quite impressive report anticipated by the market Goodyear shares have recovered recently.
The UK consumer motoring magazine Auto Express recently put ten tyre brands through a series of wet and dry braking and handling tests. Continental’s PremiumContact came out on top, followed by the Vredestein Sportrac and Goodyear’s Eagle Ventura.
Automotive hose manufacturers Phoenix and Goodyear Engineered Products have agreed to use each other’s factories to meet increasing demand on a global basis. Phoenix has six plants in Europe and GEP has six in North America and Mexico. The companies expect to expand the agreement to cover Asia and South America.
The Australian Conglomerate, Pacific Dunlop Ltd., cannot reach its income figure from 1998 of A$ 188m. In the first half of 1999 the company reached a net income of A$74.5m compared with A$ 101.7 million for the first six half of 1998.
More and more nowadays, we hear that the tyre industry is becoming increasingly global and ever-more companies describe themselves as “a global player”. But what exactly makes a company a true global player? An in-depth article in TYRES & ACCESSORIES 6/2000 looks at the criteria by which a so-called ‘global player’ should be judged and concludes that the only three companies that merit this term are Bridgestone, Goodyear and Michelin. The article examines in detail each company’s performance in the world’s most important markets, their market shares and turnover figures, their strengths and weaknesses and their prospects for the future. The article goes on to examine the home markets of the global players (USA, Europe and Asia) and discusses the performances of the lesser players and what is likely to happen to them. Today’s global tyre market is one of acquisitions and alliances, mergers and new technological advances. Competition is intense and, in terms of market share, none of the big three seems able to leave its rivals standing, neither is the gap between the big three and the second three growing. Having said that, none of the second three stands a realistic chance of becoming a true global player in the future. The article gives a detailed, objective assessment of today’s tyre industry, together with some speculation concerning what might happen in the future.
Automechanika – the International Trade Fair for Car Workshop and Service Station Equipment, Automobile Spare Parts Accessories – has set a new exhibitor record: 3,909 exhibitors occupied all of the approx. 300,000 square metres of indoor and outdoor exhibition space to present their latest products and technical innovations. The almost three percent increase in exhibitor numbers was the result of growth in the number of German exhibitors. 67 percent of all exhibitors came from outside Germany. The top five exhibitor nations were Germany and Italy, followed by Taiwan, the USA and Great Britain. The exhibition ran from 6 to 10 September 2000 and Messe Frankfurt welcomed around 150,000 trade visitors from all over the world during the five days of the fair, where exhibitors took many orders and transacted a lot of business. In contrast to this positive attitude at the trade fair, the background situation of the market does not look that good: The car boom of previous years came to a sudden end this year. The EU-Commission in Brussels is thinking about ending the exclusive distributor networks of car retailers. Parallel to this the car manufacturers – especially Ford and Mercedes-Benz – are restructuring their distributor networks, which means that they are reducing the number of their retailers. The pressure on the suppliers exerted by the car producers continues to increase and as a result they are showing a stronger interest in the aftermarket business. Furthermore Goodyear/Dunlop’s daughter company Pneumant was the fist tyre producer for several years to have a booth at the Automechanika. However, it is doubtful that this is the first example of a growing trend, as the “Reifen” exhibition, central event of the European tyre world, was held just a few months ago and it is to be considered that – in contrast to the alloy wheel business – the target audience of the tyre manufacturers is most probably not those who attend the Automechanika. In NEUE REIFENZEITUNG 10/2000 we review the show.
Pacific Dunlop itself is in deep water, but now also the daughter company South Pacific Tyres, which is a 50:50 joint-venture with Goodyear, going back almost 15 years, is itself experiencing big problems. The company will cut 495 of 1,865 jobs at its three Melbourne-plants and stop making truck tyres altogether. South Pacific Tyres will import 100 % of its truck tyre needs.
BMW has given Goodyear the go-ahead for fitting EMT tyres to the ‘Protection Models’ BMW 740iL and 750iL. Delivery commences this month.
Following a few months of indifferent performance, stock market analysts are meanwhile promoting tyre manufacturers’ shares as a good buy. The reasons for this optimism are that the rise in prices of raw materials (rubber, oil, carbon black) appears to have stopped, or at least slowed down, and that price increases announced in the USA are holding.
A Deutsche Bank analyst raised the Goodyear rating to “buy” because he believed in a turnaround story. Some analysts agreed, others saw Goodyear shares still only as “neutral”. But now it is different. Based on the latest statements from Goodyear, there are massive doubts regarding volumes and whether the pricing trend will be favourable. Analysts now believe that the situation will not improve before next year and that Goodyear shares will remain low.
Goodyear Tire & Rubber has appointed Robert J. Keegan (53) as president, chief operating officer and director of the company, effective Oct 1st. Currently president, consumer imaging of Eastman Kodak, Keegan’s appointment reinforces Goodyear’s intention to focus more on the consumer, says the company.
Imagine the scene; Goodyear chairman Sam Gibara addresses an audience of 144 leading managers from around the world, telling them of Goodyear’s ambition to be not only the world’s biggest tyre manufacturer, but also the most profitable. He tells them of the reasons behind the Dunlop joint ventures and spells out the goals for which the Goodyear ‘family’ has to strive to achieve the company’s aims. What lies in store for Goodyear? Does size matter? What changes are needed in management attitudes, distribution policy and brand strategies if Goodyear is to be the best? How important is the adoption of a mullet-brand strategy in the various world-wide markets? These and other thought-provoking questions are discussed at length. As we said earlier, imagine the scene. The truth is there was no meeting in Hawaii and Mr. Gibara did not make the speech – but he certainly could have. The article can be downloaded in full length as PDF file (size: 2.84 Mbyte, Adobe Acrobat Reader required).
Goodyear Chairman, CEO and President Samir G. Gibara announced increasing growth and profitability at the company’s annual shareholder meeting for 2000: “Early indicators show encouraging signs that our strategy is working” he said. Much of the growth will come from the more profitable replacement tyre market than from sales to auto makers.
The six tyre manufacturers making up RubberNetwork.com have signed a memorandum of association; a further step in creating the global electronic purchasing marketplace for tyres and rubber, which is on track to be up and running by the year end. The six members are: Continental, Cooper, Goodyear, Michelin, Pirelli and Sumitomo Rubber industries. On the other hand, Bridgestone has left the project. Asked for the reason by NEUE REIFENZEITUNG magazine, Bridgestone Firestone Europe said that a closer examination indicated that the relationship between costs and savings was not as beneficial as was first expected.
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