Goodyear Reports Losses
Goodyear Tire and Rubber Co., has released its delayed first quarter results, reporting record sales figures but a loss of nearly $77 million US.
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.
Goodyear Tire and Rubber Co., has released its delayed first quarter results, reporting record sales figures but a loss of nearly $77 million US.
In what is proving to be a bad year for Goodyear Tire and Rubber Co., the company has announced that it is one of several tyre producers that are under investigation from Japan’s Fair Trade Commission for alleged price rigging.
Goodyear Tire and Rubber Company, has surprised the financial community by delaying the release of its first quarter results. The results were due for release yesterday but, along with the planned investor conference, they have been rescheduled. The company is confident that it will release its financial details well before the 30 June deadline required by its creditors. In light of last year’s late release, Goodyear will also want to avoid any speculation about the reason for the delay.
Goodyear’s Two-Piece Assembly was has won a Nortech Innovation Award at the 2004 award. The ceremony, held 8 June was sponsored by the Northeast Ohio Technology Coalition. Nortech’s annual innovation awards recognise companies, non-profit organisations and individuals that have been responsible for creating, developing or implementing new ideas.
Despite its dire financial situation Goodyear Tyre and Rubber Co. has paid its chief executive $1.5 million US, in salary and bonuses last year.
The Tyre Industry Association (TIA) has announced that Jon Rich, president of Goodyear’s North American tyre business, will be the keynote speaker at the 2005 TIA World Tyre Expo.
The North American exhibition of the commercial tyre, retreading, repairing and tyre and rubber recycling industries will be held in Kentucky 20 – 22 April 2005.
Alcoa (NYSE:AA) announced that effective immediately Kevin B. Kramer, 44, has joined the company as president of Alcoa Cast Auto Wheels. He is responsible for the development and growth of Alcoa’s cast auto wheel business worldwide. Alcoa currently produces cast aluminium auto wheels at plants in the U.S., Canada, Venezuela and Italy. Alcoa’s cast auto wheels are found on numerous automobiles and light trucks worldwide. Kramer will be located at the Alcoa Automotive, Aerospace and Commercial Transportation office in Cleveland, Ohio.
The Goodyear Tire & Rubber Company announced today that the lenders under its principal United States and European credit facilities have amended the terms of the facilities to extend until June 30 its deadline for filing its Form 10-Q for the first quarter of 2004 with the Securities and Exchange Commission. Accordingly, the delay in filing its first quarter financials will not prevent Goodyear from accessing the credit facilities or obtaining letters of credit.
Richard J. Kramer, senior vice president, strategic planning & restructuring for The Goodyear Tire & Rubber Company, has been named executive vice president and chief financial officer effective June 1. Kramer (40) replaces Robert W. Tieken, who will retire on May 31. Tieken (65) has been Goodyear’s CFO since May 1994.
Hankook Tire has concluded a 3-year agreement to supply Ford Motor with 140,000 VR-rated (up to 240km/hr) K105s tyres annually. The tyres will be mounted on the Ford Mondeo, a high-quality family car, and will bear the Hankook Tire logo. The export price, to include replacement tyres, will total 22 million euros over three years.
In an ambitious test project, the american consumer magazine “The Aviation Consumer” has undertaken, the magazine bought 11 aircraft tires and subjected them to 200 simulated landings, plus a skid test. “Sometimes the cheapest tire isn’t the best deal. What matters most is tread depth and the more, the better,” the magazine said. In tread depth alone, Goodyear’s “Flight Custom III” was the winner in the June issue.
Since 1st of January 2004 the business field Deflation Warning System DWS (Warnair) belongs to Dunlop-Tech GmbH, a 100% daughter company from SRI. So DWS is not part of the joint venture Goodyear Dunlop.
The UK fast fit sector has long had an enigmatic player in the shape of Hi-Q. Even without the coming together of Motorway and Hi-Q the brand was substantial and widespread across the UK thanks to a blend of equity and partnership units. However, unlike its rivals, Hi-Q suffered from a raft of management, branding and performance problems. Even the relatively small Central Tyre operation could offer a standardised branding and a certain level of uniformity of image and service across its domain. Hi-Q was, by comparison, a sleeping giant. It was an operation that needed organisation, it needed a good shakedown and sort out. It needed someone capable and prepared to turn it on its head, shake out all the loose change from its pockets and put it back on its feet.
That was a view taken, not only by spectators but by people higher up the feeding chain in the parent Goodyear organisation. As Goodyear and Dunlop were brought together, so too were all the group operations and this led to, in Hi-Q/Motorway, a complicated and divisive structure where there were dual brands, in both truck and car, there were multiple sales teams and, to quote Graham Scholefield, the man brought in to head up the revitalised Hi-Q, “The main task was to create cohesion in the business, give everyone a sense of direction; and improve communication and motivation.”
Graham Scholefield has a considerable length of experience in corporate retailing, initially with House of Fraser and then with Kwik-Fit, holding powerful positions in both organisations. When CVC bought Kwik-Fit Scholefield was looking at finding another outlet for his retailing skills. When the option of taking on Hi-Q came up, he realised that the task offered him a real challenge, not only that but turning Hi-Q from the sleeping giant it was into the powerful retail operation it should be, would be realising untold potential. “I could see the potential of Hi-Q,” says Scholefield, “here was a massive asset under-utilised, under-performing, but with all the elements of a first class retail operation. I could see this was a business I could feel passionate about and that I could really use my retailing skills to develop its full potential.
“The coming together of Goodyear and Dunlop had created a great deal of uncertainty. The business was fragmented by old loyalties and structures. For a considerable time people didn’t know what was happening, where the future lay, and there was talk of the Equity being sold off. The perceived wisdom now is that tyre manufacturers should manufacture tyres. There was a period when they tried to control the whole chain through to the end user, but despite the obvious advantages the Equities were often usually the agents of the tyre manufacturer and sold what the manufacturer told them to sell. These were issues that had to be addressed. The difficulty of the disjointed management was one met by restructuring the business, but this could only be done once there was a commitment to the retail operation.
“Fortunately the new Goodyear Dunlop management could see merit in the retail operation and the decision to divest was reversed. We knew that there was confusion about who Motorway and Hi-Q were and what they each did. We needed to clear the clutter and create a cohesive approach. It was clear though that what was needed was a single organisation. The choice was made to re-brand the whole retail operation as Hi-Q, as that was the stronger of the two brands and the brand used for our strategic partner network. That re-signing and re-branding operation was completed by December 2003.”
While the Goodyear shares jumped around 5 per cent to 8.56 US-Dollars on the stock exchange, finance experts have reacted more cautiously. Rod Lache, DB-analyst in New York, doubts whether the contract with the unions or the closing of a factory in the USA last year is sufficient to have a positive effect on the high fixed costs. He expressed surprise that Goodyear’s volumes slipped by 1.7 per cent while the industry gained 3.7 per cent. The value of Goodyear shares is in the region of 6 US-Dollars, according to Deutsche Bank.
Goodyear has announced record sales of US$ 15.1 billion for 2003 and a net loss of US$ 802 million. Turnover in 2002 was $13.9 billion and the net loss $1.227 billion. $750 million of the increase in turnover came from favourable currency exchange rates. The company’s performance in Europe (both east and West) was satisfactory and, while Goodyear chief Keegan was very optimistic during a conference with analysts, but he had to admit that the much-needed turnaround in North America had not taken place as expected. In 2002 the corporation had to pay $241 million in interest and this sum escalated to 293.6 million last year.
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