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 has now officially announced the ratification of the labour contract with the members of the Steelworkers, who have announced that they will be using this contract as a pattern for their negotiations with Goodyear’s competitors. However, this plan is more or less unpromising.
A judge in the USA has ordered Goodyear to pay almost $10 million compensation to 34 householders, for a faulty heating hose that was used in their homes. Goodyear, as manufacturer of the hose, and a now-defunct distributor of the product were found equally liable. The actual damages award against Goodyear was $4 million, with a further $5.7 million added in interest from the date of installation of the hose. Goodyear said it will appeal the decision.
Also on show at Frankfurt is the second generation of tyre pressure control systems, developed by Siemens VDO Automotive and Goodyear. This is permanently embedded in the tyre and, as well as transmitting information about pressure, it records information on tyre wear and mileage. Because it is part of the tyre, there is no transfer of sensor needed if the tyre is moved from one wheel to another.
The website of the United Steelworkers of America shows that, of the 10 Goodyear factories that have voted so far whether or not to accept the proposed new labour deal, thrashed out between the company and the union, nine have voted for acceptance. The lone dissenting voice is that of the factory at Union City, Tennessee, where 52 per cent of the workforce voted to reject the deal. In order to be ratified, the deal needs the support of the majority of the plants and of the majority of the union members.
A number of tyre companies have published financial results for the first half of the year, with figures varying from not-so-good to impressive. These are analysed in detail in the magazine, but some brief highlights are as follows:
Michelin: Sales were down 6 per cent to 7.348 billion Euro, but excluding currency effects, this would be a rise of 4.4 per cent. Operating profit rose one per cent to 578 million Euro and net income was 165 million Euro; below what was expected, but this was almost entirely due to charges of 178 million Euro for restructuring in Spain, where 1,200 jobs will go over the next three years.
At an analyst meeting, Michelin executives were extremely cautious concerning the outlook for the rest of the year, forecasting a drop in volume for the second half and only a slight improvement in the impact of currency fluctuations. Other obstacles to improvement are the continuing high costs of raw materials and the continuing losses of the recently-acquired Viborg chain. The acquisition was a major factor in the 0.1 billion Euro increase in Michelin’s debt, to 3.9 billion Euro.
Goodyear: Second quarter (Q2) figures reveal that the company lost $73.6 million, compared to a net income in Q2 last year of $28.9 m. Sales were up nearly 8 per cent at $3.8 billion (3.5 bn), but volumes were down half a million units to 52.8 million pieces. The single most important factor in the deterioration of operating performance was an increase in raw material costs of around, $124 million, said Goodyear, even though this was offset in part by cost reductions, improved price and mix and a positive currency translation benefit of some $9 million.
The net loss for the first six months of the year was $236.9 million (1H 2002: $34.3 million loss). The 2003 figures included a rationalisation charge of $78.6 million to cater for staff reductions, while the 2002 figures were boosted by an income benefit of around £10 million as a result of the Ford tyre replacement programme. Sales for the first six months of 2003 reached $7.3 billion; 7.6 per cent up on the 1H 2002 figure of $6.8 billion. Tyre unit volume was down at 105.4 million units (106.3 m).
Continental: 2Q results exceeded the forecasts of industry experts. Compared with 2Q 2002, turnover was down 3.4 per cent to 2.825 billion Euro (2.925 bn), but operating income rose 11.3 per cent to 216 million Euro (194 m), against a forecast of 187 million Euro.
Of the four divisions, Car Tyres, Truck Tyres and Continental Automotive Systems (CAS) all showed slight reductions in turnover compared with 2Q last year, while ContiTech was up slightly. When it came to operating income, however, Truck Tyres was the only sector to show a decrease, while the best performance came from Car Tyres, which posted a 44.2 per cent improvement.
The group’s operating margin was 7.6 per cent and, while the car tyre and truck tyre divisions were slightly below this (6.7 and 7.4 per cent). ContiTech and CAS achieved 8.5 and 9.0 per cent respectively. Industry analysts were pleased at the figures, saying that the group is exhibiting “improving internal dynamics and a favourable mix of businesses with some growth and some cash flow contributors.”
Trelleborg Wheel Systems: TWS achieved sales for the first half of the year of 1,470 million Swedish Kroner (SEK), or 160.2 million Euro. Operating profit was up 33 per cent to SEK 84 million (9.15 m Euro), compared with last year’s first half figure of SEK 63 million (6.87 m Euro). During the second quarter, turnover was SEK 713 million (77.7 m Euro) and operating profit was SEK 39 million (4.25 m Euro).
Operating profit was favourably affected by the company’s restructuring programme, an improved product mix and increased productivity. High raw material prices were partially offset by price increases, especially in farm tyres.
In the USA, a panel of three federal judges has rejected a proposed tyre pressure monitoring system (TPMS) as it allowed too great a margin for error. TPMS was made compulsory in new cars following the Ford Explorer/Firestone tyre episode. The National Highway Traffic Safety Administration was ordered to come up with a TPMS for cars and it offered two systems – one which required a sensor on all four tyres (direct system) and one which used existing technology systems, such as ABS, to estimate pressure (indirect system). Consumer groups claimed that the second system was not effective all the time, and thus did not meet the law’s requirements, and the judges agreed, ordering the NHTSA to formulate a new rule.
The argument of the consumer groups was that indirect TPMS works by comparing the speeds of two diagonal wheels with the other two diagonal wheels and, as such, cannot tell whether all four tyres are under-inflated or whether two tyres on the same axle or the same side of the vehicle are under-inflated. The judges accepted this view and one of them, Robert D. Sack, said “The record discloses that the added cost for a system that worked all the time, rather than half of the time, was less than $10 per car.”
A possible beneficiary of the ruling could be Goodyear Tire & Rubber, which has developed a direct monitoring system in partnership with Siemens VDO, whereby a computer chip embedded in the tyre warns the driver of air pressure loss via radio signals to a dashboard display. The system is currently being tested by several vehicle manufacturers for their 2006 models. A Goodyear spokesperson said “we think the debate will continue between the automotive industry and consumer groups for a while. Either way, we support tyre pressure monitoring systems.”
Consumer groups were less diplomatic, hailing the decision as “perfect”. Clarence Ditlow, executive director of the Center for Auto Safety – a frequent critic of the auto industry – made his position plain when he said “This decision will block the pro-industry, anti-consumer, deregulatory campaign of the Bush administration”. This is a reference to the fact that it was the White House’s Office of Management and Budget, which had wanted a TPMS that was less costly than direct monitoring.
For the vehicle makers, a spokesperson for the lobbying group the Alliance of Automobile Manufacturers said that the AAM prefers a system that would allow auto manufacturers to choose between technologies. The spokesperson added: “the cost gap between the direct and indirect systems appeared to be wider than that cited in the ruling”, which would appear to be an indication that we may not yet have heard the last word on the subject.
Goodyear Dunlop has appointed Paul Wilde (39) as Director, Consumer Strategic Business Unit, UK. The role gives him responsibility for the consumer business of Goodyear Dunlop, covering car, van and 4×4 tyres. He joins Goodyear Dunlop from Reckitt Benckiser, where his responsibilities included Sales Director for China, General Manager, Philippines and Regional Project Director, East Asia.
Thomas A. Connell is to join Goodyear from TRW as vice president and controller reporting to Stephanie W. Bergeron, senior vice president, corporate financial operations. He is joined by Michael M. Rajkovic, vice president of finance for its North American Tire business unit. He will report to Robert W. Tieken, executive vice president and chief financial officer, and to Jonathan D. Rich, president, North American Tire.
Rajkovic replaces Richard J. Kramer, who was named senior vice president, strategic planning & restructuring by the company. Kramer moves on to become senior vice president, strategic planning & restructuring for The Goodyear Tire & Rubber Company.
“Richard has been active in driving change in our organisation and is recognised as an outstanding leader,” said Robert J. Keegan, chairman and chief executive officer, to whom Kramer will report in his new position. “His experience, plus his deep knowledge of our company, makes him a valuable addition to our corporate leadership team as we build toward our 2005 objectives and turnaround.”
In a groundbreaking move at Goodyear the company has agreed to giving the United Steelworkers of America a seat on the board of directors. In return, the union members will give up raises for three years, pay more for health care and accept smaller pensions. Those are key points in a contract agreement reached last week by the company and the United Steelworkers of America. Union members will vote on the contract by mid-September.
The long-running saga of discussions between Goodyear and the United Steel Workers of America took another turn when it was announced that the two sides had reached “a tentative agreement” on a new, three-year labour contract. The next step is for USWA’s 19,000 workers to vote to approve the deal. No details were given, but one unconfirmed press report said that the factory at Huntsville, Alabama, which produces Dunlop tyres, would close as part of the agreement, resulting in the loss of 1,000 jobs.
The long-running talks between Goodyear and the United Steelworkers of America continue to drag on after the deadline of last Friday set by Goodyear. The USWA says that it needs more time to study the latest proposals from Goodyear, which were put forward on Sunday. It is believed that Goodyear wants to shut four plants in the USA (out of a total of 14) and the union is seeking guarantees on job security. Despite the uncertainty, Goodyear shares rose 3.9 per cent in New York to reach $5.80.
Lassa has announced the appointment of John Westwood as the new senior director responsible for the running of its London-based European export sales operation. He joins the company after a long and distinguished career with Goodyear in a variety of senior sales and marketing positions. Mr. Westwood will replace Gunduz Akin as European Sales and Marketing Director, responsible for all Lassa brand sales in Austria, France, Germany, Italy, Spain, Portugal, Sweden and the UK. Mr Akin has returned to Turkey to work for Lassa’s parent company, Brisa.
Goodyear Tire & Rubber Co. has set a deadline for reaching a tentative labour agreement with the United Steelworkers of America, a spokesman for the union said on Thursday. Goodyear has told union leaders that it will move forward with unspecified plans to secure the company’s future if a deal is not struck by midday on Friday, the union said.
Goodyear and the steelworkers have been unable to reach a compromise on key issues of job security, financial restructuring and health care for current and retired employees.
Country music fans will doubtless be singing along to Brad Paisley’s latest CD unprepared for Goodyear tyres being the subject of one of the tracks on “Mud on the Tires”. The fifth track on the fast-selling CD, the song, “That’s Love,” carries these lyrics: “If she cooks all day / You’d better eat it with a smile / Doesn’t matter if it tastes just like bad gravy on a Goodyear tire / Yea, yea, yea, alright, so you bend the truth…” Since Brad Paisley mentions Goodyear in one of his songs, radio listeners in targeted markets were given opportunities to win a set of Goodyear tyres when they heard his songs,” explained Bob Toth, marketing manager of Goodyear auto tyres.
If early-season prognostications from the US National Weather Service ring true, American motorists may be in for an extra-snowy winter in many parts of the country. Goodyear officials say they’re ready for an early snowfall. Goodyear’s family of Ultra Grip winter tyres offers motorists a range of choices for seasonal tyres. The Eagle Ultra Grip GW-3 features Goodyear’s innovative V-TRED technology, which aids in dispersing water and slush from the tread. The new 3D-BIS technology provides high tread blade density and additional biting edges while maintaining block stiffness. This translates into increased grip in snow and ice, but with controlled wet and dry steering stability. A rim flange protector helps to protect expensive custom wheels from potential kerb and pothole damage during the winter. The Eagle Ultra Grip GW-3 is available in North America in 21 sizes, ranging from 15- to 18-inch rim diameters, and in aspect ratios from 65 to 35.
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