Wednesday, February 18, 2009

GOODYEAR TIRES Reports 2008 Accomplishments and Future Challenges


Fortune magazine named Goodyear the World's Most Admired Motor Vehicle Parts Company in its 2008 list of the World's Most Admired Companies. The publication ranked Goodyear No. 1 in innovation, people management, use of assets and global orientation. The company is also listed on Forbes magazine's list of the Most Respected Companies in America and its list of the Most Trustworthy Companies in America and CRO magazine's ranking of the 100 Best Corporate Citizens.

During challenging economic times, good teams adapt. GOODYEAR has announced its new Wrangler MT/R with Kevlar. Innovative new products, pinpointing truck applications for consumers meeting long term consumer demands and short term racing needs are being addressed by the company, with the launch of this new product this week.

Two years in the development pipeline, the new Wranger MT/R launch and roll-out, is important to the core off-road racing and recreation communities of consumers. Back in 2007, GOODYEAR TIRES continued on the cutting edge of open research and development to maximize its R&D results. In its 16 year relationship with Sandia National Lab, a U.S. Department of Energy laboratory, moving to develop computational analysis tools in tire mechanics, materials and manufacturing.

The data, which was applied to the new off-road product, has built on its new product leadership. "Vehicle performance depends upon forces generated at the tire-pavement-surface interface and conducting tests in a precise, laboratory environment is a quantifiable leap in the science of tire and vehicle performance. Advancements in tire handling, wear, traction and fuel economy will enhance the strength of the GOODYEAR TIRE brand."

Currently, with the restructuring of short course racing and the reorganizing of much of desert racing mirrors whats happening with the consumer market. Consumers have decreased their driving miles for the 13th month in a row. Fuel purchases have dropped in concert. 2009 is the most challenging marketplace in decades.

In new market realities, with downsized expectations in sales, GOODYEAR TIRES has a strength in the marketing oriented development process of the new tire product, it's new off-road truck tire. Unveiled in Washington D.C. to dealers, just days ago. In a smaller market, this new product is positioned to meet consumer demands at just the right time. When consumers are looking at details of purchases, even closer than usual.

GOODYEAR TIRES corporate reliance of "Leadership as Core" is a clear sign that it's on the ball in its decision making foci and capabilities to address the future.


Goodyear Tires goes aggressive
By: Denise Koeth

In these uncertain times, when the majority of consumers, small business owners and large corporations are all cutting back, Goodyear is taking a different tack.

The tiremaker is pumping up its product lineup to give dealers an edge in fighting the recession and attracting new customers. With 12 new products – the most ever introduced in a single year – Goodyear is charting an aggressive course.

The new tires address the passenger, light truck, performance and commercial segments, from the sturdy off-road Wrangler MT/R with Kevlar, to the G289 WHA for waste haul applications, to the Assurance Fuel Max tire that boasts a savings of 2,600 miles worth of gas over the life of the tire, according to Goodyear.

The products, spread across the Goodyear, Dunlop, Kelly and Fierce brands, are just a part of the strategy the company outlined to its dealers at its annual dealer conference, held the beginning of February in Washington, D.C. The theme of the conference – “The Next Generation” – was two-fold, addressing both the wave of new products as well as the next generation in ideas, service and the skills dealers need to run their businesses.

Moving Forward

“This is not business as usual,” Rich Kramer, president of Goodyear’s North American tire unit, told the 1,350 dealers in attendance. “There is nothing ordinary about the economic market we’re in.

“But 2009 is not a finish line,” he said. “Our focus is on the future – on what we can do to make Goodyear a better company for tomorrow. Now is when you build the kind of business you want to be when the market turns around.”

Kramer noted that even among the declines in miles driven and vehicles purchased in 2008, Goodyear’s marketshare increased for the fifth year in a row. And moving into 2009 and beyond, he said the tiremaker is focused on several key aspects, including: cash generation and expense control; investments in new products, people and marketing; increased adaptability; helping dealers by having a greater presence out in the field; and adapting tire production to fit market needs.

Goodyear’s “Advantage Supply Chain” will see the company making “only the tires the market wants when the market wants them,” Kramer said. By making fewer tires, concentrating on those that are in particular demand, Goodyear will increase cash flow while still maintaining high fill rates, he noted.

“Our quality of inventory has not been any better than it is right now,” said Steve McClellan, president of the North American Tire Consumer unit.

On the commercial side, Goodyear plans to grow membership and expand the benefits of its Fleet HQ program, designed to provide fast, nationwide service and business solutions to reduce fleets’ cost of ownership. Launched just a year ago, and with more than 11,400 fleets enrolled, the program has gotten 62,000 vehicles back up and running at on-the-road service calls, according to Dave Beasley, director of commercial tire sales.

“As we look forward to the next generation of Fleet HQ, we’re targeting small and midsized fleets, who our research shows want to be treated like the big national accounts,” Beasley said.

The program will also offer new benefits to members, including telemarketing efforts, fleet maintenance scheduling, and centralized fleet specification information that details precisely how each fleet prefers to be serviced, he noted.

With new products and an updated growth strategy, Goodyear is prepared to tackle the coming year head-on. Though the unfamiliar financial landscape will bring with it some tough decisions, the key is not to dwell on the negative – to make a decision and then move on, said Goodyear Chairman and CEO Bob Keegan.

“Some will fail to read market signals,” he said. “Some will plain out panic. Some will be too late when the markets rebound. Some will simply lose their way. But if we take the lessons we’ve learned together and apply them to our companies, that list of negatives will never apply to us.”

New Rollouts
The following new tires were introduced at the meeting.

Under the Goodyear Brand:

The Wrangler DuraTrac, ideal for work applications from construction and farming to landscaping and mining, features enhanced traction in deep mud and snow and enhanced lateral stability and traction in rain and snow, all while reducing road noise. The tire is available in 26 popular sizes covering 89% of this target segment, the company said.

The Assurance Fuel Max tire, with a 65,000-mile tread life limited warranty, provides 27% less rolling resistance, which equates to a 4% improvement in highway fuel economy. Several sizes are shipping now, with full availability of 27 sizes – to fit about 80% of the auto tire segment – by April, according to Goodyear.

The new Wrangler MT/R with Kevlar is the company’s first off-road tire built with DuPont Kevlar for enhanced sidewall puncture resistance. Available in March, the new tire is offered in 30 sizes and features tread guards; self-cleaning and traction in mud; biting edges on rocks, mud, dirt and sand; enhanced sidewall cut- and puncture-resistance; enhanced traction on rocks and in deep mud; rim protector, to help protect wheels from accidental curb-like damage; and rim lock, to help prevent wheel slip for minimal balancing throughout the life of the tire, the company said.

The new G289 WHA is an all-position tire for waste haul applications. A special waste haul rubber compound helps to enhance scrub resistance for long tread life. The tire also features a 24/32nds tread depth, a distinct sidewall protector rib, an optimized shoulder design, four wide circumferential grooves, and a wide footprint for cornering and handling. Available this month, the G289 WHA is offered in the 315/80R22.5 size, load range L, Goodyear said.

The new G316 LHT Fuel Max with DuraSeal is designed to help improve miles per gallon, and features DuraSeal Technology, a built-in tire sealant for commercial truck tires that instantly seals tread punctures. Available this summer in two key trailer tire sizes, 295/75R22.5 and 11R22.5, the G316 LHT Fuel Max with DuraSeal features a triple-compound construction to reduce rolling resistance and improve fuel savings, the company said.

The new G661 HSA is a regional all-position tire that will be available in April. It features a high scrub-resistant tread, with a multi-compound construction that helps to extend tread life when used in local applications that require frequent turning, backing and braking. Four full-sized, super-tensile steel belts help reinforce the tread for enhanced toughness, Goodyear said.

The new G662 RSA is the first regional tire with Goodyear’s Fuel Max Technology. It offers a 22/32nds tread depth and a pressure distribution groove to help direct pressure away from the tire for uniform treadwear and long tread life. The tire is initially available in an 11R22.5 size in early April, with the 295/75R22.5 size coming in June.

Under the Dunlop Brand:
The Graspic DS-3, a studless winter tire that features a silica-based glass fiber tread to enhance traction and control at low temperatures, will be available in the fall in 35 popular sizes with rim diameters ranging from 13 inches to 18 inches, according to the company.

The Dunlop Rover M/T Maxx Traction, available in March, is a new on-/off-road tire for light truck and SUV owners. Initially available in 17 popular sizes, the tire features center traction lugs for start-up and braking traction in sand, dirt, wet and winter conditions, along with outer self-cleaning channels to help expel mud and debris, the company said.

Under the Kelly Brand:
The new Safari TSR is an all-terrain product that offers enhanced grip both on- and off-highway. Available this spring, the tire features deep, self-cleaning tread elements and staggered shoulder blocks to aid handling in mud, sand and gravel. It will initially be available in 12 popular sizes, ranging from 15- to 18-inch rim diameters, the company said.

Under the Fierce Brand:
The new Attitude M/T – available this spring – hits the road with an initial phase of 11 popular LT and off-road sizes. The tire features large lugs and stepped shoulder blocks help to deliver intense traction in mud terrain, and a high-void tread design for enhanced self-cleaning. On the sidewall of the tire is a “barbed wire” design for a radical appearance, and a rim protector helps guard wheels from accidental curb damage, according to the company.

Part III Next Week...

Editor, Gary Newsome
Baja Racing

""Goodyear Reports Fourth Quarter and Full Year 2008 Results,
Details Actions to Address Market, Economic Challenges

- Sales of $4.1 billion for quarter, $19.5 billion for year
- Pricing/product mix gains of $263 million for quarter, $942 million for
- Significant cost savings of $205 million for quarter, $700 million for
2009 Actions
- Global product leadership extended with more than 50 new tire launches
- Cost actions raise 4-point plan savings to $2.5 billion, $700 million in
- Personnel reductions of nearly 5,000 planned, salaries frozen
- Additional capacity reduction of 15 to 25 million units over the next
two years
- Cash flow actions target 2009 capital expenditures of $700 to $800
million and inventory reductions of more than $500 million.

AKRON, Ohio, Feb. 18 -- The Goodyear Tire & Rubber Company today reported fourth quarter and full year 2008 results and detailed actions to address market challenges in a much weaker economy.

Goodyear's fourth quarter 2008 sales were $4.1 billion, down from $5.2 billion in the 2007 quarter, despite increases in Goodyear-branded market share. The company's net loss was $330 million ($1.37 per share), compared with net income of $52 million (23 cents per share) in the 2007 quarter. All per share amounts are diluted.

"Given lower industry demand, we are taking aggressive action, reducing tire production, cutting costs and adjusting investments to better match market conditions," said Robert J. Keegan, chairman and chief executive officer.

"The many positive actions we took and the results we achieved in 2008 provide a base from which we will address the market challenges we will inevitably face in 2009," he said.

2009 Actions

Consistent with Goodyear's ongoing strategies, Keegan announced actions in three key areas to address the economic environment in 2009.

Top Line Growth: The company plans an unprecedented number of new product launches in 2009, with more than 50 new tires being introduced globally. Targeted to key segments, these include the new Assurance Fuel Max tire introduced earlier this month in North America and more recently announced as original equipment on the new Chevrolet Volt electric vehicle. Significant launches that showcase Goodyear's innovative new products will be made across all geographic regions.

Cost Reductions: Goodyear plans to further reduce costs by approximately $700 million in 2009 and has therefore raised its four-point cost savings plan target to $2.5 billion. Actions include:

-- Further reducing personnel levels by nearly 5,000 in addition to almost
4,000 reductions in the second half of 2008 and freezing salaries.
-- Implementing new cost control policies to eliminate non-essential
discretionary spending.
-- Purchasing actions to lower the cost of both raw materials and indirect

In addition, Goodyear plans to eliminate between 15 million and 25 million units of additional manufacturing capacity worldwide over the next two years. Managing for Cash: The company plans to implement a number of cash flow actions in 2009, including:

-- Cutting capital expenditures to between $700 million and $800 million.
-- Reducing inventory levels by more than $500 million.
-- Pursuing the sale of non-core assets.

"Collectively, these actions address the new economic realities," said Keegan. "We will remain flexible and are prepared to take additional actions if market conditions warrant. Our goal is to ensure Goodyear is positioned for success when tire markets recover."""

Baja Racing