Robert J. Keegan calls Goodyear's consumer tire business in North America complex, and he acknowledges fixing what ails the firm's largest business unit won't be easy.
But the company's newly promoted chief executive officer, who takes on his new responsibilities Jan. 1, knows that repairing relations with the firm's independent tire dealers must be a key part of the equation.
``We fully recognize we have work to do with our dealer partners,'' Mr. Keegan said Oct. 4, repeating comments he and Goodyear Chairman Samir Gibara made earlier in the day to employees at a company town meeting. ``In some cases we're in great shape. In some cases we have work to do to repair some damage. And in some cases, we're going to have to, we recognize, win our dealers back one at a time. We know that's the way to do this.''
Mr. Keegan is replacing as CEO Mr. Gibara, who will continue as chairman (see accompanying story).
In an interview with Tire Business, Mr. Keegan said he is continuing to push all of Goodyear's worldwide business units to react faster and more effectively to customers' needs-a business approach he has described as market-driven. And six of seven units are doing well.
But it's the seventh and largest operation, North American Tire, that he needs to get moving in the right direction.
Goodyear, he explained, lost market share in North America during the past year, in large part, due to decisions the company made to establish a level pricing structure with its wholesale tire distributors (WDs).
``We made some decisions that we knew would cost us some share,'' he acknowledged. ``That share loss is a little larger than expected, although it's not huge. And frankly, we've suffered the consequences for more months than we expected.'' This all occurred, he noted, ``because we changed the pricing game.''
But in trying to reverse this market share decline, Mr. Keegan vowed that the company will not back down on its efforts to establish pricing discipline for its products in the marketplace. ``That concept holds,'' he said.
This effort to establish pricing parity, begun earlier this year, angered a number of the company's larger wholesale distributors, causing them to hold back on purchases from the Akron-based tire maker.
Instead, Goodyear is going to work with these WDs ``one account at a time,'' Mr. Keegan said. ``We want them to know what we're doing and what the implications for them are. We're also trying to look at their economics, probably more closely than we ever have.''
And some of the WD's are getting more comfortable and are coming back, he said, adding the company has adjusted some prices, particularly in high performance tires, ``without giving up the price discipline that was really needed in the marketplace.''
Earlier this year, in an interview with Tire Business, Mr. Keegan spoke about wanting Goodyear to become more customer focused and market responsive, some of the traits exhibited by the company's formerly independent subsidiary, Kelly-Springfield Tire Co.
He believes he now has the right person to lead that charge in Jack Winterton, a long-time company employee who rose through the ranks at Kelly and who understands the market-driven philosophy.
``Winterton is the personification of that Kelly culture,'' Mr. Keegan said of the newly named director of field sales for Goodyear's North American Tire consumer tire division. ``He's pushing the North American team pretty hard. He's pushing me hard. But it's all good because he's coming here as a change agent.''
And, he added, ``he has no time for the bureaucracy of Akron.''
Asked how the company's G3 Xpress distribution program for smaller dealerships is faring, the former Kodak executive said it is falling a bit short of expectations.
G3 Xpress is a key focus in the planning that's going on for next year, he said, but the company is looking at how the program fits in with its other channels of distribution. Mr. Keegan likened this to putting together a complex puzzle, seeing, for example, how G3 Xpress fits with the firm's wholesale distributors and large regional retailers.
But he won't let channel conflicts sway which direction the company needs to go. In looking for opportunities, channel conflicts ``can't be the first thing that comes to mind,'' he said.
``We're going to be a broader participant and be much more effective in this market. That is the direction.''
Mr. Keegan and the North American team also are reviewing the ``On the Wings of Goodyear'' advertising campaign, which was launched earlier this year.
While he called the execution of the campaign inconsistent as a result of some budget rearranging, he also said measurements of its effectiveness ``looks pretty good.''
``I still think, and I think everyone here feels, that `On the Wings of Goodyear' is a great theme.'' But the campaign, he said, needs to get a little more product-focused and be more consistent in its application.
As he begins the transition to taking over as CEO, Mr. Keegan realizes he has got to make progress quickly. ``Almost anybody in a CEO's position in a job today is on a short leash,'' he said. Knowing that will allow him ``to be able to create the changes that I need.
``We've got to do well,'' he said. ``We've got to change things quickly. We don't have huge amounts of time, so we've got to show progress.''
Is he confident that he and Goodyear can get the job done?
``I'm confident from the standpoint that if we went back a year and a half ago, we would not have had six of seven business units that had real positive momentum in their markets. We would not have had that,'' he said. ``And if you ask how we got that done: good people-really focused on doing four or five things exceptionally well.'' That and being totally consistent in their execution, he added.