Despite a strong fiscal showing last year, ``Big Blue'' faced a controversy with some of its independent tire dealers. In July, four California tire dealers filed a suit against the company in what could prove to be a lasting-and growing-headache.
That litigation-seeking class action status on behalf of all Goodyear franchise dealers in California-charges the tire maker has, since at least 1990, unfairly diminished the ability of its franchise and contract dealers to operate profitable businesses.
At least 60 of Goodyear's 143 dealerships in the Golden State may become party to the suit, if it is approved as a class action.
The tire maker's troubles emanate from deals it made in the last few years to distribute tires through discount stores and mass merchandisers, including Sears, Roebuck and Co., Wal-Mart Stores Inc. and Discount Tire Co. of Arizona.
Among the host of charges leveled against Goodyear, the four California dealers claim their primary supplier:
Concealed from franchise dealers the more-attractive prices it offered to discount stores and mass merchandisers;
Provided discount stores and mass merchandisers with price advantages on replacement tires that allegedly were promised but not available to franchise and contract dealers; and
Unfairly pressured dealers to participate in ineffective cooperative advertising programs that could not compete with advertising from other Goodyear distribution channels.
Other tire dealers are said to be pondering similar actions against the tire maker.
Goodyear dealers in Texas are reportedly studying the California case in consideration of taking similar action.
In November, Tire Business Staff Reported that the co-owners of Cactus Tire Inc., a Goodyear franchise in Phoenix, have been negotiating with the tire maker for almost two years, attempting to resolve grievances that echo the California dealers' concerns.
In frustration over what they now describe as an ``adversarial'' relationship with their supplier, the Cactus Tire owners say they are mulling over filing a lawsuit against Goodyear either individually, or as a potential class action on behalf of all Goodyear franchisees in Arizona.