Goodyear will start off 2003 fresh, with a new CEO running the show.
Samir ``Sam'' G. Gibara-the tire maker's top executive since January 1996-will step down Jan. 1, in favor of current President Robert J. Keegan.
Following a morning meeting Oct. 1, the Akron company's board of directors announced that Mr. Keegan, 55, will take over the CEO helm and also will retain his duties as president and chief operating officer.
Mr. Gibara, 63, will remain chairman of the board as well as chairman of a newly formed executive committee of the board.
Goodyear put a positive spin on the change, which comes amid a plummeting share price and poor financial results and prospects. The decision is the start of a ``smooth and orderly transition'' to put Mr. Keegan into the CEO's seat, a Goodyear spokesman said.
The company's financial state had nothing to do with the decision to replace Mr. Gibara, the spokesman added. Rather, Mr. Gibara and the board thought it would be appropriate to make the move now while he is still chairman and can offer guidance to Mr. Keegan in his new role.
The transition is much like what Mr. Gibara had before he took over the CEO reins from Stanley Gault in 1996, holding the positions of president and chief operating officer, the spokesman said. Mr. Gault then stayed on as chairman until June 1996 when Mr. Gibara assumed that position as well. He served as both president and CEO until Oct. 1, 2000, when Mr. Keegan-a 26-year Eastman Kodak Co. veteran-was brought in to handle the president's duties.
Fluent in several languages, Cairo, Egypt-born Mr. Gibara has some 30 years of international business management experience on his resume. Most of that came in Europe, where he first became a corporate officer of Goodyear in October 1992, when he was elected vice president of strategic planning and business development, and was given additional responsibility as acting vice president of finance and chief financial officer.
The company's new board executive committee was formed to provide more frequent, timely guidance to Goodyear's senior leadership team, the spokesman said. Five members of the board will serve on the committee along with Mr. Gibara. According to Goodyear, Mr. Gibara will advise and assist senior management in matters related to the company's strategic plan, industry and market trends, company business initiatives and relationships with key joint venture partners, shareholders and customers.
``The changes we are announcing today provide for both the orderly transition to new leadership for the company and more active counsel from the leaders of our board on matters affecting our business,'' Mr. Gibara said Oct. 1. ``I am looking forward to providing what assistance I can to Bob as he assumes his new role as CEO.''
No decision has been made on when Mr. Gibara will leave the company altogether, the spokesman said, and he will consult with the board on the appropriate timing for his exit.
Times of financial difficulty are when companies often make management changes, analysts say. While Goodyear said Mr. Gibara's leaving his CEO post is the first step of a planned transition, there's no question the 36-year company veteran's tenure had many disappointments, said Efraim Levy, an analyst with Standard & Poor Corp. in New York.
Mr. Gibara has been the top man for some notable Goodyear moments during the past seven years, including:
* Record sales and income;
* An historic six-year labor agreement with the United Steelworkers of America union;
* A leadership position in the run-flat tire race, especially through a 2000 joint venture with Group Michelin; and
* The 1999 deal with Japan's Sumitomo Rubber Industries Ltd., giving Goodyear control of Dunlop Tire operations in North America and Europe and propelling the firm toward regaining the world's top tire company ranking by sales.
However, Mr. Gibara also laid out the plan projecting the company's sales would be as high as $23 billion by the end of 2003-a figure clearly out of reach. Within the past few years, the company also has implemented-and trashed-an ``A-B-C'' grading system for salaried employees, a program leading to a lawsuit for age discrimination; made numerous organizational changes; and felt the negative aftereffects of the Dunlop deal.
Goodyear also has seen its financial picture turn sour since 1998, including a 2001 loss of $203 million. Its stock price, once as high as $76 in 1998, dropped into single digits on Sept. 23. The share price closed Oct. 2 at $8.60.
And the company's stock was deleted from the Dow Jones Industrial Average in 1999 after a run of 69 years.
The economic downturn, unpredictable demand fluctuations and rising raw material costs haven't helped Goodyear during Mr. Gibara's tenure.
``The company hasn't accomplished some of its objectives,'' Mr. Levy said. ``But it's been a combination of lack of execution, mistakes and suffering from things out of its control.''
As for Mr. Keegan, he said he's excited about his new opportunity. ``I relish the challenge,'' he said. Mr. Gibara added that in Mr. Keegan's two years at Goodyear, he's ``gained an impressive understanding of the industry and is now fully prepared to take the company forward.''
From a prospective investor's view, wholesale leadership changes may have been a more favorable solution if the company was intent on making a change, Mr. Levy said. Mr. Keegan has been part of the team the last couple of years, and some may feel a fresh start for Goodyear would be more attractive, he said.
But while Mr. Keegan will be trying to fix a difficult situation in a highly competitive industry, it's also a good opportunity, Mr. Levy said. Especially if the company can get a break or two.
``If the economy rights itself and this industry strengthens, the timing could be very good,'' he said.