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.
Deutsche Bank analysts have upgraded Goodyear shares from “Market Perform” to “Buy”. They are of the opinion that Goodyear has made significant progress in reforming its cost structure and this, coupled with lower raw material prices, will mean much better-than-expected profits. The analysts also believe that Goodyear can capture many Firestone dealers in February next year, when their contracts with Firestone expire.
In the UK, Dunlop and Goodyear have decided to combine their administration offices to increase the effectiveness of the joint venture. The offices – and a new distribution centre – will be in Birmingham, preferably at Fort Dunlop. The Wolverhampton offices will eventually be closed, but production at Wolverhampton will not be affected. The two sales divisions will function independently, even though they will operate from the same location. The move will be completed over the next 12 months.
Philip A. Laskawy, (60) who retired as chairman and chief executive officer of Ernst & Young LLP on June 30, has been elected to the board of directors of The Goodyear Tire & Rubber Company. “Mr. Laskawy successfully led Ernst & Young’s re-engineering effort that resulted in higher levels of customer service, greater diversity and outstanding revenue growth,” said Goodyear chairman and CEO Samir G. Gibara. “His experience and focus on change management will be a valuable addition to our Board as Goodyear seeks to get even closer to its customers.”
China Tire Holdings Ltd and Orion Tire Corp’s Lawsuit against Goodyear has been sent back to the federal court by the 9th Circuit Court of Appeals. This revives a long-standing battle over China’s grant of a joint venture plant to Goodyear. The claimants say that Goodyear unlawfully persuaded a state-owned factory to abandon a contract with China Tire. China Tire alleges that Goodyear gave gifts, including jewellery, scholarships and travel to Chinese officials. The case though may face early dismissal if China Tire do not present adequate new pleadings.
In common with other manufacturers in the UK, Goodyear has been suffering cost and productivity problems at its plant, which is not competitive in global markets. In October last year, Goodyear Wolverhampton took the step of issuing an HR1 notice to the Department of Trade & Industry, which in effect gave the workforce a number of possible solutions to the problem and a 90-day deadline to arrive at an answer. Since the issuing of the notice, discussions have been on-going between management and unions to try to thrash out a mutually-acceptable solution. Eventually, such a solution was agreed, which involved workers moving from a four-shift to a five-shift system, and which was recommended to the workforce by the unions. However, this recommendation was ignored and, in a ballot of the Wolverhampton workforce, the proposal was rejected. The reaction of Goodyear’s management to this was immediately to announce that it had “no other option other than to instigate actions that will make some 500 associates redundant from the Wolverhampton plant. Later it was announced that “only” 240 jobs are to be lost at Goodyear’s Wolverhampton factory. This is on top of 215 redundancies earlier in January, but the total figure of 455 is less than was originally expected after cost-cutting proposals from management were rejected by the workforce, despite being recommended by the unions. A Goodyear spokesman is reported as saying that the job losses could save the plant from closure.
As if last year’s voluntary recall of 6.5 million Firestone tyres in the USA had not caused enough damage, the Japanese-owned tyre manufacturer is facing another crisis. May 21 Bridgestone/Firestone was severing all its business connections with Ford. That was it, the 100-year relationship was over, Bridgestone/Firestone had had enough and this was goodbye. It certainly seemed a drastic step to take, but the reason became apparent the next day, when Ford announced that it was recalling 13 million Firestone tyres; an exercise that would take nine months and cost the company up to $3 billion. This is a cost that Bridgestone cannot afford and the company has indicated that any demand from Ford to help with the costs would receive short shrift. Press reports say that Ford President Jacques Nasser has a statistical study which shows that Firestone Wilderness tyres fail three times more often than the industry average. Bridgestone/Firestone suggests that the Explorer design is to blame; something which Ford strenuously denies, saying that Explorers sold with, for example, Goodyear tyres, have had no tread separations. As far as John Lampe of Bridgestone/Firestone is concerned, the company has no obligation to participate in a further recall. In a statement, he said; “No-one cares more about the safety of the people who travel on our tyres than we do.” Bridgestone President Shigeo Watanabe gave the reason for splitting from Ford, saying that the new recall, coming on top of last year’s exercise, would have been “a life or death matter for Bridgestone/Firestone.” Later on, he played down fears that not supplying Ford would have a marked effect on Bridgestone/Firestone, saying that, at most, the group would lose 1.5% of its sales worldwide. On the plus side, freed from the need to be polite to a major customer, Bridgestone/Firestone can now say what it thinks about the part played by the Explorer in the accidents and defend itself more vigorously against the still-vocal consumer and pressure groups, not to mention the lawyers, of course. John Lampe, who wrote to Jacques Nasser, outlining Bridgestone/Firestone’s reasons for severing business relations with Ford: “Business relationships, like personal ones, are built upon trust and mutual respect. We have come to the conclusion that we can no longer supply tyres to Ford since the basic foundation of our relationship has been seriously eroded.”
Underlining the news from Goodyear, the US trade group the Rubber Manufacturers Association has cut its forecast of tyre shipments for 2001 from 316 million tyres to 303 million. Last year’s figure was a record 321 million tyres. July tyre shipments to car manufacturers were 5 per cent down on the same month last year, while commercial market shipments fell by 32 per cent. The RMA predicts shipments of 304.4 million tyres next year and 317 million in 2003.
Goodyear has announced that its tyres will be the sole make in use in a form of motor sport new to the UK: ASCAR, or Anglo-American Stock Car Racing. This is based on the US-style stadium stock car racing, NASCAR, and will consist of a nine-race series, beginning later this year on a specially-built banked oval track in Northamptonshire, at Rockingham.
Finger pointing between Ford and Bridgestone/Firestone is continuing and has reached the point where the tyre manufacturer has terminated its business relationship with Ford after 100 years. In a written statement, BF-boss Lampe said “we believe that the auto maker is attempting to divert scrutiny of the vehicles by casting doubt on the quality of Firestone tyres. The tyres are safe and as we have said before, when we have a problem we will acknowledge that problem and fix it. We expect you (Ford) to do the same.” The assumption that Ford’s Explorer is a problem-car seems to be based also on the fact that Ford felt forced last week to recall more than 50,000 Ford-Explorers equipped with Michelin and Goodyear-tyres, avoiding the word recall but calling it a “Customer Satisfaction Program.” While the business with Ford accounts for only five per cent of BF’s total turnover, virtually everything depends on the success of the Explorer for Ford; the company’s best selling car for years and its cash cow.
Goodyear Tire & Rubber has appointed George Rietbergen (37) as its European director of e-commerce. He comes to the tyre manufacturer from KLM Royal Dutch Airlines, where his most recent post was director, e-commerce and commercial development.
The NHTSA is still conducting a preliminary evaluation of Goodyear’s Load Range E-tyres, but the manufacturer is confident that its tyres are totally OK and that the evaluation will come to an end soon.
The Goodyear Tire & Rubber Company has elected Cathryn M. Fischer, vice president and chief marketing officer. Fischer, 39, will be responsible for the world’s largest tiremaker’s global marketing and brand management efforts. She will report to Robert J. Keegan, president and chief operating officer.
Engineers at the University of Purdue (Indiana/USA) have developed a new technique for analysing tyre vibrations that identifies which features produce the most noise, a step toward designing quieter tyres and reducing highway noise. A mathematical model is used to identify which parts of a tyre produce the most noise. The vibrations are characterised on a graph, a visual representation that’s like a fingerprint of each tyre’s vibration pattern.
“The slowing economic market” is the reason given for the news that Goodyear is to lay off 1,400 associates at five plants in the USA. The figure equates to around five per cent of the company’s US work force and Goodyear would not say whether or not the layoffs were temporary or permanent. Production at the five factories is being cut from continuous operation to five or six-day working and the layoffs follow 8,000 job losses earlier this year, mostly outside the USA.
Tyreserve is a new company aiming to create a big impression in the UK car fleet servicing market, which is reckoned to be worth around 200 million Pounds a year. The company is a wholly-owned subsidiary of national wholesaler Stapleton’s Tyre Services and is being launched at the beginning of April, backed up by an investment by Stapleton’s of two million Pounds. The fleet car market is extremely competitive, with the market leader being Kwik-Fit, followed by ATS Euromaster, FTM Tyrefit and National Tyres & Autocare. These first three have a market share of around 85% and, last year, Kwik-Fit acquired the shares of FTM. FTM is an association of independent retailers, banding together to provide a national fleet service and facilities. Tyreserve is aiming at FTM as its main target – when FTM was acquired by Kwik-Fit, there was some unease expressed by some independents, who wondered how this would affect the status quo. It promises to be an interesting time, with a new player entering the market and, presumably, the existing players determined to defend what they already hold. What makes it more interesting is that the main directors of Tyreserve were all working up until recently for Kwik-Fit Fleet. At least two names will need no introduction to the UK tyre trade – Managing Director David Goodyear and Network Director Charles Hespin.
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