ORLANDO, Fla. (Feb. 10, 2003) — Goodyear North American Tire President Jon D. Rich hopes to turn around the listing business unit this year by simplifying the way it does business with its dealer customers and allow them to devote the resources necessary to make their own businesses profitable.
Based in part on feedback from dealers he's visited the past few months, Mr. Rich crafted a four-point plan of action to halt falling sales and return North American Tire to respectable profitability. He and three other key North American Tire executives outlined their plans for 2003 to more than 1,000 independent dealers gathered at the company's national dealer meeting in Orlando the morning of Feb. 10.
Mr. Rich's plan calls for:
1) Stabilizing the company through aggressive cost-cutting measures;
2) Simplifying the organizational structure;
3) Executing a number of efficiency measures, starting with the 6 Sigma process; and
4) Expanding the business by adding new points of sale and generating more business through existing customers.
Regarding stability, Mr. Rich pointed out Goodyear has to align capacities with demand better — a goal that will include more than doubling the number of tires the firm imports from its overseas plants to 10 million units. “Our plants, no matter where they are, have to be competitive,” Mr. Rich said. “We either have to fix them, or close them.”
On simplifying business, Mr. Rich said the company will organize North American Tire along three profit centers — consumer tires, commercial tires and off-road/aviation/etc. tires — to streamline order processing and improve fill rates. Already, Goodyear said it has spent $4 million in the past few months on new molds for Dunlop-brand tires and expanded the production of Dunlop tires to five plants from two.
On execution of plans, Mr. Rich said the company anticipates $200 million in annual savings from using 6 Sigma business practices. Thus far, the company has re-assigned 100 key employees to implementing 6 Sigma and could assign 100 more during the year, he said.
Regarding sales growth, Mr. Rich emphasized that Goodyear is committed to “right” pricing its products and bringing stability to its pricing structures. “We have to eliminate the ‘surge and purge' mentality, he said, that has grown out of the company's tendency to offer specials at the end of a quarter to prop up sales.
Mr. Rich's four-point plan was supported by a number of other initiatives presented by Jack Winterton, director dealer sales/consumer tires; Michael P. Kitz, vice president marketing and brand management; and Theodore J. Fick, vice president, commercial tire systems.