Goodyear

About Goodyear

Folks at The Goodyear Tire & Rubber Company never worry about flat tires. The company leverages a global alliance with Sumitomo Rubber Industries designed to dominate the tire industry. (It trails Bridgestone and Michelin.) Goodyear sells mainly new tires under the Goodyear, Dunlop, Kelly, Fulda, Debica, and Sava brand names. Through its alliance with – more... Sumitomo, Goodyear makes Dunlop tires for sale in North America and Western Europe. In Japan, the tire makers own businesses that separately sell to OEMs and aftermarkets. Goodyear operates 50+ plants in more than 20 countries, and about 1,400 tire/auto repair centers. More than 60% of sales are made outside the US.

The company is divided into four segments: North American tire; Europe, Middle East, & Africa (EMEA) tire; Latin American tire; and Asia/Pacific tire. North American tire, the company's largest segment, accounting for 43% of sales, makes tires at seven plants in the US and two in Canada and offers automotive repair and maintenance at about 700 locations under the Goodyear and Just Tires banners.

The EMEA segment, the company's second largest segment, representing 35% of sales, operates more than 15 tire plants in the UK, France, Germany, Luxembourg, Poland, Slovenia, South Africa, and Turkey. Besides serving the auto, truck, and farm and construction equipment manufacturers of its own region, the segment's plants export tires to North America and other regions. The company owns about 180 retail outlets in the region. 

Latin American tire (11% of sales) makes tires at five plants in Brazil, Chile, Colombia, Peru, and Venezuela. Outside the car market, the segment makes pre-cured treads for truck tires and retreads truck and aircraft tires. Asia/Pacific tire (also 11% of sales) makes tires at eight plants in China, India, Indonesia, Japan, Malaysia, and Thailand. It sells tire under the Goodyear brand throughout the region, as well as the Dunlop brand in Australia and New Zealand. The segment has about 360 retail outlets in Australia and New Zealand operating under the Beaurepaires and Frank Allen brands.

Year-over-year net sales rose about 21% in 2011 thanks mainly to a good price and product mix, strong demand for tire-related chemical products in the North American tire segment, and favorable foreign currency exchanges. By segment, North American tire enjoyed an uptick of 20%, buoyed by the chemical product market. EMEA tire's year-over-year 2011 sales surged 25% due again to a good price and product mix as well as higher volume. Demand for the company's retail and retread offerings also helped this segment. Latin American tire's sales were up about 15%, due again to a good price and product mix, as well as more sales for the company's tire-related businesses, and a favorable foreign currency exchange, especially in Brazil, which accounts for about 58% of the segment's net sales. Asia/Pacific tire increased 16% owing once again to a good product and price mix, as well as a good foreign currency exchange, mainly in Australia, representing about 44% of the segment's net sales, and China.

After weathering a net loss of $375 million in 2009 and $216 million in 2010, Goodyear enjoyed a net income of $343 million in 2011. Segment operating income was $917 million in 2010 and then rose to $1.3 billion in 2011, supported by the strong price and product mix, which compensated for a 30% jump in costs for raw materials, mainly natural and synthetic rubber.

Intent on making more tires at lower cost facilities, Goodyear relocated its tire-making operations from Dalian, China, to Pulandian, China, in 2012. Goodyear is additionally expanding or modernizing plants in Brazil, Chile, Germany, and the US. One factor in these efforts is the strategy of developing more business in emerging markets. More broadly, the company embarked on a cost-saving plan to cushion it against the impact of an uncertain global economy. As of 2011 the company recorded about $750 million in savings as part of expected savings of $1 billion from 2010 to 2012.

In 2011 Goodyear sold its tire reinforcement wire business (located in Luxembourg and North Carolina) to South Korea-based Hyosung for $50 million. The same year it sold its farm tire business in Latin America to a Titan International unit for $99 million. In 2010 Goodyear had agreed to sell its farm tire business in Europe as well as Latin America to Titan, but the European part of the deal fell through, and Goodyear does not have a time frame for making that sale. (In 2005 Titan had purchased Goodyear's North American farm tire business.) Also in 2011 Goodyear closed a facility in Union City, Tennessee.  – less

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