AKRON—Goodyear reported a $6.6 million loss in the third quarter Oct. 24, citing rising material and energy costs and reduced original equipment tire shipments.
But the Akron tire maker also is gaining market share in North America in the OE and replacement markets because consumers are turning away from the Firestone brand in the wake of Bridgestone/Firestone Inc.'s recall of 6.5 million P-metric light truck tires, said Samir G. Gibara, Goodyear chairman and CEO.
The company's net sales for the quarter were $3.48 billion, a 5.9-percent increase over the same period in 1999. Sales for the nine-month period were $10.5 billion, a 12.5-percent increase over last year.
Higher raw material costs—especially for oil-derived products—were a "major factor" in the losses posted for the third quarter, Mr. Gibara said. "Third-quarter 2000 earnings were approximately 40-cents-per-share lower than they would have been if these costs had remained at 1999 levels," he said. "Energy costs are about double what they were last year."
Goodyear also pointed to incremental costs in Europe, the euro's weakness vs. the U.S. dollar, competitive global market conditions and fewer shipments due to auto industry production cutbacks as negative factors in the results.
Dunlop operations, which were integrated into Goodyear in 1999 as part of the global alliance with Sumitomo Rubber Industries Ltd., contributed $540 million in sales during the third quarter and $1.7 billion in sales year-to-date.
Mr. Gibara said Goodyear will continue to gain—and keep—market share in North America because of the Firestone recall and its aftermath. Goodyear-brand tires have accounted for more than half of the size P235/75R15 tires replaced by Ford dealers on Ford Explorers since Bridgestone/Firestone implemented the recall in August, he said. "We'll gain, and we'll retain what we gain," Mr. Gibara said.
In North America, Goodyear reported a 4.3-percent increase in tire unit volume in the quarter to 29.5 million units, bringing unit volume for the nine months to 86.8 million units, 7.1 percent ahead of 1999 levels. In both cases, the company said, the increases were attributable to the addition of the Dunlop operations.