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February 14, 2005 01:00 AM

Goodyear must listen, not just talk, Keegan tells dealers

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    GRAVEVINE, Texas (Feb. 14, 2005) — Goodyear had a breakout year in 2004 and needs another one in 2005, Chairman and CEO Robert Keegan told dealers and employees at the company's 2005 Dealer Conference Jan. 30-Feb. 2 in Grapevine.

    In an unscripted, heartfelt speech to a crowd of about 2,400, including more than 1,600 independent tire dealers, Mr. Keegan said the process of rebuilding the company and transforming the corporate culture, which began two years ago, is now in place.

    Guiding that effort are several principles that he outlined.

    Goodyear will win, he said, if it is intensely market-focused, listens instead of talks, senses what's happening and makes decisions based on the markets, views its first job as building the dealer's business, never compromises on quality and is innovative in all areas.

    The company will win, he continued, if it puts the dead fish (problems) on the table. “Bad companies put those dead fish under the table,” he said. The fundamental principle of Goodyear going forward is: “We deal with our dead fish today.”

    Goodyear will win by promoting and rewarding team behavior and team performance, embracing change and action, not rhetoric, by keeping its promises and playing the game to win.

    The company did not always carry through these principles in the past, he said. “Today, we're executing against all of those, and we'll get better.”

    It's those principles that are helping to improve the company, he added.

    Mr. Keegan's words seemed to resonate with dealers in the audience.

    “For the last two years, they are a different company to do business with,” said Jim Faught, president of Northwest Tire & Service Inc. in Flint, Mich. “I feel like a customer and not like an entry-level employee.”

    “This was such an encouraging meeting,” added Peter Veldman, president of Tire Rack in South Bend, Ind. In his speech, Mr. Keegan included everyone and really looked after his employees, Mr. Veldman said. “I'm really amazed with the attitude of the employees.”

    Goodyear's come a long way in the last couple of years, said John Andonian, president of Evans Tire & Service Centers in Escondido, Calif. “They're making changes to adapt to market conditions. That's certainly different than in the past.”

    Describing the “new” Goodyear, Mr. Keegan stated, “We are not arrogant. We are confident.”

    This comment, too, struck a cord with Northwest Tire's Mr. Faught. “Those are great words to say, but in the last two years there's been an elimination of arrogance, and their customers have gained confidence in them,” he said. “You get a lot of positive action rather than just words from the top down.”

    Mr. Keegan noted that through the first three quarters of 2004 all of the company's seven business units were ahead of their annual plans and had seen significant improvements in their market positions. “So we are starting to drive the momentum in our company from a financial standpoint,” he said.

    He singled out praise for the North American Tire team, including President Jon Rich. “What I'm really proud of is the fact that you guys took on one of the most difficult tasks in American industry two years ago,” he said. “I think we'd all acknowledge that. Things weren't doing well and you and your team had to come in and turn it.”

    Mr. Keegan also thanked Goodyear's independent tire dealer customers for sticking with the company in its struggles to refocus and regain momentum.

    “You guys have trusted us. You've supported us,” he said. “That's real easy to do when things are in the ascendancy. It's not so easy to do when you are struggling. And we were struggling.”

    Not only did dealers hang in with Goodyear, they also helped the company's new management team understand the business better, he said.

    “For guys like Jon Rich, Larry Mason (president of consumer tires) and myself, who were new to the business, you guys educated us,” he said, and that doesn't always happen in other industries.

    “Some of you have been for John, Larry and me our teachers, counselors, critics….You guys were our mentors and you showed us the business through your eyes,” he continued.

    In terms of products, Goodyear is doing a better job of identifying “sweet spots” in the market and marrying that with the company's technology.

    No longer does the company believe it should launch new products only once a year. “We're going to introduce new products when we have great products that fit a market need,” he said.

    Commenting on branding, Mr. Keegan pointed to a story in USA Today about Detroit Pistons basketball player Richard Hamilton, who braided his hair in the shape of an Assurance TripleTred tread pattern.

    “Can you imagine Goodyear two or three years ago having a tread pattern in somebody's hair and thinking it was a great idea?” he asked. “No. 1, we wouldn't have done it, and No. 2, we wouldn't have thought it was a great idea.”

    In the future, the company's branding will have a sharper focus for both flag and associate brands. “Why?” he asked. “We want the consumer to understand what they are getting from our branding.”

    Goodyear also will be much more aggressive in the promotional area, he said.

    As a company, Goodyear is a work in progress and there are more tough decisions ahead to get the company's cost structure where it needs to be, Mr. Keegan said. “But I can tell you we are really starting to enjoy most of the work and the progress.”

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