AKRON (Feb. 14, 2001) — Goodyear suffered a net loss of $102 million in the fourth quarter — due largely to rationalization charges taken to cover workforce reductions and plant closings — pulling the company´s net for the year down 83.4 percent to $40.3 million.
Net sales in the quarter declined as well, falling 4.1 percent to $3.53 billion from $3.68 billion in 1999. For the year ended Dec. 31, 2000, sales increased to a record $14.4 billion, up 7.9 percent from $13.4 billion in 1999. The Dunlop businesses in Europe and North America, acquired through the 1999 alliance with Japan´s Sumitomo Rubber Industries Ltd., contributed about $2.3 billion in sales for 2000.
Overall, earnings for the year suffered because of increasing raw material costs, the decline in the value of the euro vs. the dollar and reduced North American original equipment sales, the company said. To counter these negative effects, Goodyear has raised prices, reduced production to align inventories with demand, curtailed discretionary spending and announced workforce reductions.
North American tire operations, aided by the full-year addition of the Dunlop Tire activities, reported a near ten-fold increase in operating income for the year to $260.7 million, while sales rose 7 percent to $7.11 billion.
In the fourth quarter, sales overall were up 4.1 percent to $1.79 billion as shipments were up but prices did not keep pace. Replacement market consumer tire shipments jumped 14.6 percent over the 1999 period and original equipment shipments fell 16.4 percent.
As a result of the replacement market increase, Goodyear gained three percentage points of market share during the quarter, according to Chairman Sam Gibara, who said gains were achieved by expanding the distribution channels — in some cases by signing on Firestone dealers — stronger advertising and taking advantage of a consumer "flight to quality."
Replacement shipments of medium truck tires slipped 13.2 percent, while OE truck tire shipments plummeted 39.9 percent.