AKRON—The global alliance between Goodyear and Japan's Sumitomo Rubber Industries Ltd. became official Sept. 1, returning Goodyear to the No.1 spot among tire makers, with a global market share of more than 20 percent. Under the terms of the agreement, Goodyear gained control of SRI's Dunlop tire operations in Europe and North America, including Buffalo, N.Y.-based Dunlop Tire Corp. and Dunlop's 46-outlet Allied Tires retail chain in Florida.
While the impact of the new alliance is only beginning to be felt, three top officials at Allied already have been replaced by longtime Goodyear executives.
Let go by Dunlop during the week preceding the ownership transition were Allied President Robert Hunnell, Derek Gaudio, vice president of retail sales, and Tim Fenisey, vice president of operations.
Goodyear has named Steve McClellan as general manager for Allied, now a wholly owned subsidiary of Goodyear, and tapped Byke Nugent as sales and marketing manager.
With the completion of its far-reaching global alliance, Goodyear becomes not only the world's No. 1 tire maker, but SRI's second-largest shareholder, with a 10-percent stake in the company. And, beginning in March 2001, it gets a seat on SRI's board.
The transaction is expected to increase Goodyear's consolidated annual sales by $2.5 billion. The company reported revenues of $12.6 billion in 1998.
Additionally, the tire maker said that ``anticipated synergies and cost improvements'' will add an estimated $300 million to $360 million to the joint ventures' operating profit during the next three years.
``While Goodyear's return to its longstanding position as the world's largest tire maker is important to our associates, it offers real benefits for our customers and our shareholders,''said Samir G. Gibara, chairman, president and CEO.
``The addition of the Dunlop brand gives us a tire lineup that is unmatched in the marketplace. It gives us better global flexibility to serve original equipment manufacturers and a more-competitive product portfolio for our replacement customers,'' he continued.
``We anticipate building on Dunlop's past achievements and increasing sales on both continents, as well as in Japan where we have gained an important foothold.''
Mr. Gibara said one of Goodyear's objectives is ``to be No. 1 or No. 2 in every market in which we compete.''
Already the largest tire maker in North and South America, the Sumitomo deal advances Goodyear to the No. 2 position in Europe. Bolstered by Dunlop, Goodyear said it now holds almost 22 percent of the approximately $70 billion global tire market.
The alliance with SRI creates four joint-venture companies, according to Goodyear: one in North America, one in Europe, two in Japan and two synergy-focused support ventures in the U.S.—one for global purchasing and one for sharing tire technology.
Goodyear made a cash payment of $936 million to SRI and has majority ownership in all the joint ventures except the two in Japan.
Allied Tires rang up $43 million in sales in 1998, but based on a statement from Marco Molinari, Goodyear's vice president of sales and marketing, North American Tire, the tire maker apparently was not happy with Allied's recent track record.
In announcing the assignment of Messrs. McClellan and Nugent, Mr. Molinari noted that both men ``bring the right chemistry of operational focus and retail marketing excellence to turn Allied's performance around, as well as again positioning Allied tire as a player in the highly competitive tire retail market in Florida.''
After joining Goodyear in 1988, Mr. McClellan served in a variety of finance positions before becoming business financial manager for its Southern Region, based in Jacksonville, Fla. He also was manager-finance for Goodyear's retail operations and most recently served as general manager-west for Goodyear Auto Service Centers.
In his new position with Allied, Mr. McClellan will report to John Peer, Goodyear's director of retail operations.
Mr. Nugent joined Goodyear in 1978, working as a store manager in a number of the company's auto centers before moving to Houston 10 years later to be a region service specialist. Most recently, he was marketing manager-sales promotions in the Southern Region.