Skip to main content
EVENT TRACKER
Keep track of rescheduled, canceled industry events with our COVID-affected event tracker - Powered by Snap Finance
Close
Sister Publication Links
  • Rubber & Plastics News
  • European Rubber Journal
tb-logo
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • OPINION
    • CORONAVIRUS
    • AUTO INDUSTRY
    • BUSINESS/FINANCIAL
    • COMMERCIAL TIRE
    • FACTORY FIXES
    • GOVERNMENT & LAW
    • INTERNATIONAL
    • MOTOR SPORTS
    • NEW PRODUCTS
    • RETAIL TIRES
    • SERVICE ZONE
    • SEMA/AAPEX
    • SMALL BUSINESS
    • TIRE MAKERS
    • SPONSORED CONTENT
    • Tire Cologne canceled; rescheduled until 2022
      New round of Paycheck Protection Program funding opens
      Vaccine may usher sense of normalcy
      Cover-up: More retailers requiring face masks to curb COVID
    • DTM switches horses mid-stream; awards race tire contract to Michelin
      Icahn Auto trims fiscal 2020 operating loss despite 14% lower sales
      Oshkosh unit gets contract for new USPS local delivery vehicle
      Sumitomo adds treadwear-detection to 'Sensor Core' toolkit
    • CarAdvise partnering with RepairSmith mobile repair services
      Goodyear to raise prices by up to 8% on all passenger tires on April 1
      Point S posts strongest year ever in sales profit, growth, store growth
      Conlan Tire buys BestDrive locations in Ark., Okla., Texas from Continental
    • Conlan Tire buys BestDrive locations in Ark., Okla., Texas from Continental
      Michelin upgrades 2 lines of Energy-branded truck tires
      TravelCenters plans 6 TA Express sites in California in 2021
      Carlisle TyrFil broadens recycling technology options
    • USTMA joins coalition supporting passage of Equality Act
      McMahon's Best-One increases its minimum wage to $15
      Oshkosh unit gets contract for new USPS local delivery vehicle
      Conti recalling 94,000 Conti-, General-, Barum-brand LT/SUV tires
    • DTM switches horses mid-stream; awards race tire contract to Michelin
      Sentury's 10-year global expansion strategy will include plants in North America, Europe
      Rebound in car tire demand drives USTMA market forecast for 2021
      Michelin driving for '100% sustainable' tires by 2050
    • DTM switches horses mid-stream; awards race tire contract to Michelin
      Bridgestone World Solar Challenge canceled due to pandemic restrictions
      Pirelli, Goodyear ink sedan racing series contracts in Canada, Europe
      Goodyear extends partnership with Nürburgring race circuit
    • U.S.-sourced Milestar Weatherguard AS710 offers all-season value
      Michelin upgrades 2 lines of Energy-branded truck tires
      Falken revamps winter tire lineup with studless Eurowinter products
      Michelin launching ‘eco-responsible' performance tire for sporty EVs
    • U.S.-sourced Milestar Weatherguard AS710 offers all-season value
      New Nexen Tire Garage offers dealers digital resources
      CarAdvise partnering with RepairSmith mobile repair services
      Goodyear to raise prices by up to 8% on all passenger tires on April 1
    • Pennzoil offering carbon-neutral lubricants for passenger cars
      Washington dealership uses new-school solution for recruiting auto techs
      Marinucci: Customers may ignore dangerous conditions
      Automotive Lift Institute introduces Check360 inspection, label
    • SEMA survey shows resilient auto aftermarket in 2020
      SEMA scholarships and loan forgiveness now available
      WTC hosting webinar Jan. 20 on load-capacity standards
      Denver's Brian Sump named AAPEX Shop Owner of the Year
    • SEMA survey shows resilient auto aftermarket in 2020
      Trade groups oppose minimum wage increase proposal
      New stimulus package fixes PPP loan confusion
      Vaccine may usher sense of normalcy
    • U.S.-sourced Milestar Weatherguard AS710 offers all-season value
      New Nexen Tire Garage offers dealers digital resources
      Goodyear to raise prices by up to 8% on all passenger tires on April 1
      Sentury's 10-year global expansion strategy will include plants in North America, Europe
    • Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
      Sponsored By Yokohama Tire Company
      Stocking Tires for Crossover SUVs
      Sponsored By AppointmentPlus
      Three Important Lessons Learned for the Tire Business During a Pandemic
      Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
  • SHOP FLOOR
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
    • Video: Balancing Tire
      An introduction to wheel balancing
      Wheel weights: Balancing form with function
      Choosing the right balancing equipment
    • Video: Demounting
      Tire changer types, tips and trends
      How to clear rim rust and corrosion
      An introduction to demounting, mounting and inflation
    • Video: Safety
      Customers
      Considerations for shop safety policies
      Introduction: Creating a culture of safety
    • Video: Tire Repair
      Essential tools, materials and equipment for tire repair
      An introduction to tire repair
      How to properly patch a puncture
    • Video: TMPS Service
      The life-saving work of TPMS
      An introduction to TPMS service
      The importance of proper relearn procedures
    • Video: Training
      Internship ideas to attract tech talent
      Choosing the right auto service tech school
      Intro: Finding and training technicians
    • Video:Vehicle Lifting
      The gravity of proper lift points
      Safety essentials when using jack stands
      An introduction to lifts and lift safety
    • Video: Wheel Torque
      The importance of torque specifications
      Introduction to proper wheel installation
      Torque check and recheck recommendations
  • Multimedia
    • VIDEOS
    • PHOTOS
    • PODCASTS
  • Events
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
  • Data
    • DATA STORE
  • Resources
    • DIRECTORY
    • CLASSIFIEDS
  • ADVERTISE
  • DIGITAL EDITION
  • Awards
    • Tire Dealer Humanitarian Award
MENU
Breadcrumb
  1. Home
  2. News
July 20, 2004 02:00 AM

Rich leading Goodyear turnaround

Mike McNulty, Crain News Service
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    AKRON (July 20, 2004) — As Goodyear North American Tire goes, so goes Goodyear.

    It's an oversimplification of the company's overall problems, but the primary business unit of the tire maker hasn't done well the last few years and, principally because of that, neither has Goodyear. During that time, five of the firm's six other divisions have become profitable.

    But things are changing at North American Tire (NAT), and Jon D. Rich is leading the charge. While the division hasn't turned the corner yet, he promises it won't be long before it does.

    Why? Because of new products, increased demand created by better economic conditions, as well as the firm's cost reduction program, which has led to more efficiency.

    However, it goes deeper than that, the president of the division said in his office at Goodyear's headquarters in Akron. Greater innovation and quality, better marketing, improved brand strength, better relations with dealers and other initiatives have resulted in steady improvement within the division, he said.

    “Overall, I'm pleased with the progress we've made so far,” Mr. Rich said. “Investors will see progress quarter by quarter. We made significant improvement in the first quarter and we'll continue to build on that in the second period.”

    While the North American segment posted a $31.7 million operating loss during the first three months of 2004, that's an improvement from a $66.5 million loss registered in 2003's first period. Sales for the quarter rose 12 percent to $1.76 billion—caused partly by favorable pricing and product mix, primarily in the consumer replacement market—and strong volume in the commercial original equipment market.

    Rough road

    It has been a bumpy ride for Mr. Rich since he became the top executive of NAT in December 2002 after a stint as president of Goodyear's chemical division, where he led the unit's turnaround by restructuring the operation and expanding it into high-growth markets.

    When he took over, NAT's sales and operating income were down for both the fourth quarter and the year, and the division was considered the primary reason Goodyear was losing billions of dollars.

    Cutbacks, layoffs and plant closings were common and continued through 2003 as the company moved to trim between $1 billion and $1.5 billion in costs and gain 2 percentage points of market share in North America and 1 point globally by the end of 2005.

    The successful chemical division was on the selling block. Investors and analysts were nervous.

    In February 2003, Mr. Rich unveiled a four-point plan to stabilize the division by cutting costs, simplifying its overall structure, creating greater efficiency and improving its sales structure.

    He set in place a program to double the number of tires Goodyear imports to about 10 million annually and update or close North American factories that weren't competitive. Thousands of workers eventually were laid off.

    But even as he put each initiative in place, Mr. Rich realized an impact tire was needed, and he knew there were few new products in the pipeline. Goodyear needed “a great new product ready to unveil at the 2004 dealer conference, about 13 months away. Ordinarily, it would take almost twice that long to go from concept to product,” he said.

    Enter the Assurance

    NAT got what it needed and more with the development of the new all-season Assurance tire line, aimed at the mid-level and luxury passenger tire segments. Amidst much fanfare, the line was launched at Goodyear's February dealer meeting and caught on quickly with the public.

    It has continued to sell well—the firm called Assurance its most successful tire launch ever, even better than the Aquatred—and initial production at one plant has spread to four: Lawton, Okla.; Napanee, Ontario; Tyler, Texas; and Gadsden, Ala.

    The line consists of two tires, one featuring ComforTred technology aimed at the premium tire market and the other with TripleTred technology for all-season conditions.

    Demand for Assurance “is more than three times our initial expectation,” Chairman and CEO Robert J. Keegan told analysts recently.

    Goodyear is counting on the Assurance line to become for passenger cars what the Eagle line is for performance, Fortura for sport-utility vehicles and Wrangler for light trucks, company executives said at the product's launch.

    The new line is selling at three times the rate of the much-heralded Aquatred, which came out in 1992 and was Goodyear's top-selling tire for a long period of time, Mr. Rich said. Goodyear is considering increasing production of the line and perhaps making it at other plants to keep up with demand and wants to add more sizes.

    The company also introduced the Eagle GT-HR performance tire and the G395 steer tire, a commercial truck product, during that critical 13-month period. Mr. Rich said both have been successful.

    In fact, Goodyear hired back several hundred workers so far this year to handle growing manufacturing needs.

    Mr. Rich said the company also is on course with the development of run-flat tires, using its Impact technology, and, “I think it will be a significant piece of business.”

    Staying the course

    Meanwhile, NAT is sticking to its plan to remain efficient and follow its lean Six Sigma initiative.

    More belt-tightening probably is ahead, although the company has no cutback plans at the moment, Mr. Rich said. “We must be careful how we spend our money. When we find areas where we can save money, we will.”

    The firm continuously is improving its tire factories, he said, making them more efficient and productive.

    North American Tire trimmed some private label lines that were losing money but beefed up others that have been successful, he said. The bottom line is the firm has grown with some private label customers, “which has had an impact on earnings. There's no lack of commitment on the private label side,” Mr. Rich said.

    “Overall we're down (in the private brand segment) but only in areas where we planned to be down because they were areas where we were losing money,” according to Mr. Rich. “We're trying to grow our brand business. We're trying to make a profit. And I'm not embarrassed about that.”

    Goodyear likely will increase tire production overseas, where it currently makes about 10 percent of its tires for the U.S. market, while it continues to boost manufacturing in the U.S.

    “I think they're making a lot of the right moves,” said Dennis Virag, managing director of Automotive Consulting Group Inc. in Ann Arbor, Mich. “It's a longer term endeavor. I know Goodyear is closing some plants that are unprofitable and investing in some that show more promise. Now it's a matter of continuing the process. They can't take their eye off the target. And once they get there, they can't let up or things could reverse themselves.”

    One stumbling block to growth for all tire makers has been rising natural rubber (NR) prices, which have more than doubled during the last year.

    Goodyear tried to absorb NR, raw material and energy increases but ultimately had to boost its products' prices. “We still haven't recovered all of the increases,” Mr. Rich said. “I'm disappointed natural rubber prices haven't come back.”

    Moving forward

    The moves Mr. Rich has made so far tie in with Mr. Keegan's growth program, unveiled in April 2003. Mr. Keegan focused on seven key factors—topped by strong leadership—that would lead to Goodyear's turnaround. Of those, four probably affect NAT's progress the most, according to Mr. Rich:

    * Leadership—“We've put a great team together, they've been together for a while and now have the chance to really lead.” He cited Larry Mason, president of consumer tires; Jack Winterton, Mr. Mason's right-hand man; Steve McClellan, vice president of commercial tires and overseer of the firm's truck business; and Chuck Mick, vice president of off-highway, who handles farm, race, aviation and off-the-road products.

    * Cost control—“Lots of tough business decisions were made to remove significant costs from the company,” Mr. Rich said. “While the toughest part of the process is over, we constantly look to eliminate costs that do not add value.”

    * Product leadership—Assurance is just one piece of the turnaround thus far. Its success has been beyond the firm's expectations. “And we're attacking the next new products with optimism that carries over from Assurance,” he said.

    * Distribution—“Nobody is more important than our independent dealers. (Our) relationship with that huge distribution network needed to be improved, and we have a better relationship now than we've had in years. We had to help them grow their businesses.”

    “At the end of the day,” Mr. Rich continued, “the person behind the counter has got to have confidence in your product…has got to want to sell it because it is good for his or her business. It's our responsibility to give them a reason to sell Goodyear and make sure they have the support and resources to do so.”

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    tb-logo
    Reader Services
    • Contact Us
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber & Plastics News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • Digital Edition
    • Careers
    • Ad Choices Ad Choices
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • OPINION
      • CORONAVIRUS
      • AUTO INDUSTRY
      • BUSINESS/FINANCIAL
      • COMMERCIAL TIRE
      • FACTORY FIXES
      • GOVERNMENT & LAW
      • INTERNATIONAL
      • MOTOR SPORTS
      • NEW PRODUCTS
      • RETAIL TIRES
      • SERVICE ZONE
      • SEMA/AAPEX
      • SMALL BUSINESS
      • TIRE MAKERS
      • SPONSORED CONTENT
    • SHOP FLOOR
      • BALANCING
      • DEMOUNTING
      • SAFETY
      • TIRE REPAIR
      • TPMS
      • TRAINING
      • VEHICLE LIFTING
      • WHEEL TORQUE
    • Multimedia
      • VIDEOS
      • PHOTOS
      • PODCASTS
    • Events
      • ASK THE EXPERT
      • LIVESTREAMS
      • WEBINARS
      • SEMA LIVESTREAMS
    • Data
      • DATA STORE
    • Resources
      • DIRECTORY
      • CLASSIFIEDS
    • ADVERTISE
    • DIGITAL EDITION
    • Awards
      • Tire Dealer Humanitarian Award