North America
The Spirit of America, one of three Goodyear airships operating in North America, has been involved in a minor accident. On Wednesday, the blimp broke loose from its moorings while landing at its base in Carson, California and drifted for 300 yards before crashing into a compost pile. There were no serious injuries and Goodyear says it is too early to say how bad is the damage, or how long the Spirit of America will be out of commission.
Goodyear has signed an agreement whereby its tyres will be fitted as standard on all Volvo trucks sold in North America over the next three years. The tyres will be manufactured at Goodyear’s plants at Danville and Topeka and products will include the new generation G395 LHS plus Goodyear’s complete commercial portfolio of application-specific tyres. The tyre manufacturer says it is delighted to be associated with a prestigious brand such as Volvo and expects considerable benefits in sales of replacement tyres.
Tyre manufacturer Goodyear announced a net loss of 332.4 million US Dollars for the first nine months of this year. The net loss for the 3rd Quarter totalled $105.9 million. Sales in the last quarter rose around eleven per cent from 3.5 to 3.9 billion Dollars. However, volumes increased only by approximately two per cent from $54.4 (3Q 2002) to $55.3 million (3Q 2003). According to Goodyear, the turnover increased partly due to currency-exchanges and partly due to an improved product-mix. CEO Keegan is of the opinion that the efforts of the last months are bearing fruit. Nevertheless the fact is that the company disappointed again on the full line.
Goodyear’s 3rd Quarter 2003 results were taken up by the financial world with a deal of restraint and also with some disappointment. The Analyst at UBS Investment Research fears that because of the continuing loss situation in North America Goodyear shows signs of a possible breach of a covenant, while an analyst at Fitch Ratings asks impatiently, how long one has to wait for signs of the promised turnaround in North America? There was particular criticism that Goodyear was able to increase sales volumes only by approximately four per cent, in a market which grew by 6 per cent, while competitor Cooper added around nine per cent. Doubts were voiced that Goodyear can increase prices to the full extent needed, because of raw material price increases. While Goodyear mentioned positive trends, these were not apparent to observers.
Continental Teves is launching production of six new electronic stability control programs in North America for model year 2004 vehicles. Continental expects to supply more than 3.6 million stability control units to automakers in North America, Europe and Asia in the 2004 model year, a 7 per cent increase on 2003.
BMW is to build a research centre focused on information technology in an automotive research park in Greenville. Michelin North America Inc., the Greenville-based subsidiary of the French tyre maker, said it will also participate in the park, in a capacity not yet defined. Nan Banks, a spokeswoman for the company in Greenville, said Wednesday Michelin will play a role in the park. “We’re going to determine the form that support will take as the project unfolds,” she said. Michelin, which already has a research and development operation in Greenville County, sees Clemson’s park “as something that will expand and enhance the activities we already have here.”
So far the acquisition of General Tire in 1987 has not been a success story. During this year the loss will amount to 100 million Euro at least. This has to be changed, according to Conti’s chairman Manfred Wennemer and Martin de Louw who is responsible for Continental’s passenger tyre division and works in the North American headquarters in Charlotte, North Carolina. The two set out the goal: during the last quarter of 2005 the break-even point has to be reached. Wennemer puts his hope in de Louw as a new member of the board. De Louw in his strategy focuses on new products, the extension of low cost production sites such as Mexico, and the persuasion of a multi-brand strategy that in turn is borne by the brands Continental and General Tire. For the replacement market Continental hopes for good business with the car dealers because the tyres with the prancing horse have been widely sold on the OE market during the last couple of years – there will be a pull-through effect. Wennemer states clearly that Continental will continue its business with truck tyres in North America because this division has always been very profitable.
Dunlop North America announced the SP Super Sport Race; a Z-rated radial designed for super car owners and autocross enthusiasts who want a non-competition, street-legal tyre that nevertheless has race-like levels of grip. The Super Sport Race is available in eight Z-rated sizes, with aspect ratios from 40 series down to 30 series and for 17″ and 18″ wheels. Target cars include Audi TT, A4 and A6, Porsche 996 and 986, BMW 3 series, 5-series, M3 and Z3, Honda S2000, VW Golf GTi and the Mercedes SLK, CLK, C-class and E-class.
Continental Tire North America, Inc. (CTNA), has announced that it is supplying original equipment tires to the Ford Motor Company for the company’s all-new 2004 F-150 pick-up truck. Continental is supplying Ford with ContiTracTM P255/65R17 tires, General AmeriTrac TRTM P255/70R17 tires and General AmeriTrac LT245/70R17 tires. “The F-150 is one of Ford’s best-selling vehicles, and we are pleased to help Ford fulfill its product promises with our Continental and General tires,” said Andreas Gerstenberger, vice president of Continental’s original equipment tire business.
Goodyear is to re-state its financial results for the years 1998-2002 and for the first two quarters of this year. This is due to the implementation of a new accounting system in 1999 and errors in inter-company billing systems. The adjustments will not affect Goodyear’s cash position, nor its access to credit facilities. Another effect is that Goodyear is providing estimated 3Q results, rather than a detailed announcement. The estimate is for a loss of between $90-$115 million on sales of $3.9 billion and this figure includes rationalisation charges of $56 million for a factory closure and employment reductions in North America and Europe.
Ford’s third quarter figures exceeded analysts’ forecasts, although they were still in the red. The company made a net loss of $25 million, compared with a loss for 3Q 2002 of $326 million. Turnover was down to $36.9 billion, from $39.3 billion a year ago. Automotive sales in North America lost $116 million and worldwide, the automotive loss was $609 million. Away from vehicles, Ford Credit reported a record net income of $504 million for 3Q, up from $294 million for 3Q 2002.
GM has announced a 3Q net income of $425 million, compared to a net loss in the same period last year. The downside was that the group made more money from its finance operations than from selling cars, with profits falling in North America and a loss in Europe of $152 million. Things were better in Asia, where profits more than doubled to reach $162 million. GM warned that declining markets in the US and Europe, currency values, increased costs of the new labour contract with unions in the USA and on-going pension costs mean that the group will not achieve its aims for 2003 in the US (to earn at least $1.7bn) nor in Europe (to lose less than $200 million).
Goodyear has appointed Lawrence D. Mason (43) to the newly-created post of President, Consumer Tires for North America. He will be responsible for sales to dealers, distributors, mass retailers, company-owned outlets and OE vehicle manufacturers. Mason joins Goodyear from Huhtamaki – Americas, where he was president of North American Foodservice and Retail Consumer Products. Before that, he spent 19 years with Proctor & Gamble in a variety of sales and brand management posts.
Continental Tire North America is to cut production at its plant in Mayfield, Kentucky, by 22 per cent, resulting in the loss of 200 jobs; around 15 per cent of the total workforce. Rising costs, especially so-called “legacy” costs were blamed for the move.
The Goodyear Tire & Rubber Company has stated that its new labour contract with the United Steelworkers of America (USWA) meets the operational flexibility and cost-savings goals established prior to the negotiations. “Our goal for these negotiations was to achieve what some thought was impossible: a fair agreement that contributed approximately 1 billion dollars in cost savings and cost avoidance over its three-year term without a work stoppage,” said Robert J. Keegan, Goodyear chairman and chief executive officer.
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