DAYTONA BEACH, Calif. (March 8, 2005) — Goodyear and NASCAR officials already have met on extending their exclusive tire supply contract, even though the agreement doesn't expire until after the 2007 racing season, according to Goodyear's top tire executive.
It was NASCAR that first approached Goodyear about opening the discussions, and the two sides met earlier this year, according to Jon Rich, president of Goodyear's North American Tire unit.
“It was an excellent meeting, and we'll use that as a foundation to go forward,” Mr. Rich said during an interview at Daytona International Speedway two days before the Daytona 500, the first race in NASCAR's Nextel Cup 2005 season.
This season marks the eighth year of a 10-year agreement between the tire maker and NASCAR, with the pact set to expire following the 2007 campaign. Besides the Nextel Cup series, which is the top NASCAR division, Goodyear also exclusively supplies tires to NASCAR's Busch and Craftsman Truck series.
Mr. Rich said he expects the two sides to hammer out a new deal over the course of the next couple of months. “I have every confidence that between NASCAR and us, we'll reach an agreement that will extend Goodyear for as far as we can imagine,” he said.
From Goodyear's side, the company obviously benefits by its connection with what has been the fastest growing sport in the U.S., he said.
Conversely, from NASCAR's perspective, Mr. Rich added, Goodyear has provided a safe, consistent tire. “They want everybody to be the same and let the drivers see who wins out on the track,” he said.
A NASCAR spokesman confirmed that the racing group did approach Goodyear about an extension. “We try to negotiate all of our contracts well ahead,” he said. That way, both parties have ample opportunity to put all issues out on the table, including long-range plans.
“Obviously, we know Goodyear builds quality tires, and tires are very critical to the success of NASCAR racing,” the spokesman said. “Drivers have to be confident in the tires, which they are.”
With safety being the No. 1 issue with regards to tire supply, he said Goodyear has done well at producing a tire that is consistent not only within each race, but from race to race. During the week leading up to the Daytona 500, Goodyear did pull a pool of 900 tires following some evidence of adhesion problems, but the tires had no further problems during the qualifying and final race.
NASCAR has no timetable on completing negotiations on an extension, the spokesman said, other than that officials want to have a new deal in place before the start of the 2007 season.
Mr. Rich said the negotiations are not related to earlier talk that rival Bridgestone/Firestone was planning to make a run at the NASCAR deal. Published reports claimed BFS planned to begin testing tires this year either on a Craftsman Truck or Busch series car.
BFS in 1995 challenged Goodyear in Indy car racing after being absent from the sport for many years. Teams supplied by the Nashville, Tenn.-based tire maker that were racing in both CART and Indy Racing League began to dominate beginning in the 1996 season, and Goodyear left the sport after the 1999 campaign.
“It really had nothing to do with it,” Mr. Rich said. “If you talk to anyone from NASCAR, I think they'll tell you what they think about their relationship with Goodyear.”
A BFS spokesman said the company doesn't comment on potential partnerships.
Mr. Rich said he believes the days of the “tire wars” in racing are over, noting that Formula One—where Group Michelin and Bridgestone Corp. both compete—also is considering going with just one tire brand. “Tire wars are very expensive for the teams,” Mr. Rich said.