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 Engineered Products has added high-pressure braided, spiral and thermoplastic hoses to its product range, making the company a full-line provider of hydraulic hoses and providing a single-source supplier to the sector. The US fluid power hose market is worth in excess of $1 billion and growing at an annual rate of over three per cent.
In Las Vegas, where the SEMA show is currently taking place, Goodyear’s chairman, CEO and president Robert J. Keegan found the time for an exclusive interview with TYRES & ACCESSORIES. It wasn’t his plan, says Keegan, to only bring in new executives from outside into the company, but to promote long-time colleagues as well, if they were capable of leading. But Keegan doubts that those who have led Goodyear into the current crisis are those who can bring the company out of this situation. The chairman of the tyre maker calls this “changes for victory.” Keegan is convinced that right now he has the appropriate personnel aboard in order to move ahead with the company. Keegan points out seven key elements of his strategy: leadership, cash is king, cost structures, tapping the full potential of all channels of distribution, product leadership, build-up and upgrading of Goodyear’s brands, and an optimal supply chain. In Northern America Goodyear expects a remarkable improvement now that Jonathan Rich, who is president of North American Tire, has been able to hire the right team. According to Keegan this is “the best team we have ever had in this area.”
For Pirelli the current year is on schedule in the face of good sales and earnings. Higher prices for raw materials won’t burden Pirelli’s results before the new year. Talking to TYRES & ACCESSORIES at the SEMA show in Las Vegas, Dr. Francesco Gori, Managing Director of the Pirelli Tyre Sector, again affirms the good business in the USA. For the second time in a row Pirelli will end a year making a profit on the biggest tyre market in the world. This is even more remarkable, because Pirelli has just opened its MIRS-plant in Rome, Georgia, for which the company has incurred launch costs. During the last years the Italian company was pleased with an annual sales growth of about 20 per cent. This was partly because of the OE business Pirelli undertakes with car makers Ford and Chrysler. But not only that, the tyre maker has gained ground also on the replacement market after the sell-out through mass merchandisers has been stopped. In Latin America Gori expects Pirelli to be clearly number one ahead of Goodyear, whose Mexican activities structurally belong to the North American business (Nafta). The prospects are rather good that Pirelli will generate sales of more than 3 billion euro during this year solely with tyres; during last year this economic indicator stood at 2.857 billion euro. Exact figures concerning third quarter performance will be published on November 11.
During the last three years the Michelin group has made better progress on the American market than experts had expected. This progress was supported by the Firestone disaster at the end of the last decade. Additionally Michelin profited by Goodyear’s persistent bad shape. Talking to TYRES & ACCESSORIES, Jean-Michel Guillon, COO for Michelin Americas Small Tires (MAST), states unequivocally that the tyre maker does not write off or underestimate any of its competitors. But as a matter of fact Michelin’s North American business is excellent. Michelin’s three flag brands Michelin, BFGoodrich and Uniroyal are well-positioned, and every single marketing measure is aligned with other corporate marketing measures. Michelin clearly is the market leader, has the highest prices and the Michelin brand receives the best ratings from J.D. Power. The prospects for the company are promising.
Ford has great hopes for the 2004 version of its F-150 4×4 vehicle. The F-150 is already the US’s most popular-selling vehicle and the 2004 version is marketed with the phrase “built Ford tough”. It includes larger-than-before tyres and wheels and the Goodyear Wrangler AT/S tyres supplied as OE are in the size LT 275/65 R18 – representing Goodyear’s first 18″ OE selection in radial light truck tyres. The same size of Wrangler tyres have also been chosen as OE on the 2004 Ford Harley-Davidson Edition pickup and the Ford F-250 Super Duty.
Eduardo A. Fortunato (50) has been appointed president of Goodyear’s Latin American tire business, succeeding Chris W. Clark. Fortunato’s previous post of president and MD of Goodyear Brazil has been taken by Chris Corcoran, currently director of sales and marketing, Latin America. Fortunato joined Goodyear in 1975 in the Engineered Products division.
According to the website of the United Steelworkers of America, Bridgestone Firestone is seeking major wage and benefit concessions from the union. Furthermore, the company says that it “cannot and will not follow a pattern agreement ” like the one recently agreed with Goodyear. A spokesman for Bridgestone Americas said that the company would not negotiate in the media.
Reduced supply and increased demand – notably from Chinese companies – have pushed Indonesian rubber prices to a record high. Bad weather has restricted the amount of rubber tapped in Indonesia and other producing countries such as Thailand. Tyre grade rubber price is around 66.75 cents/lb, compared with last December, when the price was at a low of 39 cents/lb. A trader said that most deals tended to be for small quantities and short delivery. There has also been increased demand from Bridgestone and Goodyear.
Chris W. Clark (52) has been appointed to the newly-created post of senior vice president of global sourcing, responsible for activities from procurement to manufacturing to global sourcing. He will head a new organisation that links all of Goodyear’s global manufacturing and supply chain activities directly to improved customer service and business results. Clark joined Goodyear in 1973 and his most recent post before the current promotion was as president of the company’s Latin American region.
Rick Navarro has been appointed vice president, business development, responsible for developing and co-ordinating strategies to achieve business growth and profitability through acquisitions, divestitures, mergers and joint ventures. He joins Goodyear from Solectron Corp., where he was senior vice president of corporate development. Before that, he worked for Honeywell International.
It was a quiet day on the legal front for Goodyear yesterday, with only one more law firm announcing that it was going to bring a class action against the company, following the recent admission that income had been over-stated. Reaction to recent events has been mixed, with website message boards showing a sharp divergence of views – unsurprisingly, there are bitter comments about the management, both past and present, but there are harsh words too for the lawyers, who some see as exploiting an unfortunate situation for financial gain. Taking Goodyear’s share price as a barometer of opinion shows that yesterday it rose 17 cents, to close at $6.72.
Yesterday we said that a Goodyear shareholder was instituting a class action against the company over its re-statement of profits, alleging that Goodyear deliberately misstated its profits in order to maintain an artificially high share price. Today, the company has been hit by a flurry of similar actions as lawyers across the US leap on to the bandwagon. A typical announcement from a firm with offices in Connecticut and California says that it has commenced a securities fraud class action claiming damages against Goodyear, Samir Gibara, Robert Tieken, Robert Keegan and Stephanie Bergeron and invites disgruntled shareholders who bought Goodyear shares at the time in question to join the action. No doubt other actions will be brought as more and more law firms try to get in on the act – something which will do nothing to improve Goodyear’s relations with both investors and financial institutions.
The image of scavengers circling a recently-dead corpse may be premature in the case of Goodyear, but it is one that comes irresistibly to mind as the news breaks of more and more firms of lawyers initiating class action lawsuits, claiming damages against the company and named executives following the recent announcement that income had been overstated by up to $100 million. Five separate law firms announced towards the end of last week that they would begin an action (the announcement from Goodyear was only made on the Thursday, so these were certainly quick off the mark) and, so far this week, another five companies have joined the list, with no doubt more still to come. So far, the effect on Goodyear’s stock has been negligible, with shares closing yesterday up 21 cents, at $6.55.
Goodyear India has been chosen as OE tyre supplier for Skoda Octavia, GM Chevrolet Optra, the Telco City Rover and Telcoline 4×2. Goodyear is the sole tyre supplier for the City Rover and is also the sole supplier for the DaimlerChrysler Mercedes E Class.
The revelation by Goodyear that it has overstated profits by $100 million over five years has led to deep concern among investors. One shareholder filed a lawsuit, alleging that profits were deliberately mis-stated in order to maintain a high share price. The day after Goodyear’s announcement, shares fell by 19 per cent, eventually recovering to close nine per cent down at $6.19. The episode underlines the uneasy relationship between Goodyear and its investors, with some analysts wondering whether it will cause a delay to the promised issue of new stocks and bonds.
If you would like the latest news from the Chinese tyre industry in Chinese, visit our partner site TyrepressChina.com. Or click below to continue on Tyrepress.
