When Goodyear and Sumitomo Rubber Industries Ltd. made headlines in early 1999 with their plan for a global alliance, the world—including the tire industry world—was a different place.
The Akron-based tire maker still wanted to have the prestige of being the top tire company across the globe. But it had gaps in its global footprint—a term not much in use 16 years ago—one mainly in Japan.
Goodyear was looking for the alliance to boost its market share, with Sumitomo being the catalyst to build the brand there. In an interview at the time of the deal, then-Goodyear Chairman Samir Gibara said rather than invest a ton more money in the country, Akron-based Goodyear would become “family in Japan” to gain what it couldn't on its own.
He said the Dunlop brand was key to the “Good, Better, Best” brand offerings popular at the time, as the tire could fill Goodyear's gap of not having a “Better” tire to sell through dealers and its stores. Mr. Gibara also said Goodyear in essence was buying a controlling position of the former Dunlop Tyre, as it existed before Sumitomo had bought it 20 years earlier.
Likewise, Sumitomo had little presence in North America, and the thinking was that Goodyear would play the role of building it up in North America.
After what seemed like a strong start, the alliance appeared to level off and not pay tangible benefits in recent years. Goodyear claimed its efforts to boost its brand in Japan actually were hindered, rather than aided, by Sumitomo.
Goodyear also never seemed to fully capitalize on the Dunlop brand. At one time it ranked behind only Michelin in terms of reputation in Europe, and even after that faded, it was a name that still had certain panache. But for Goodyear, the brand always seemed like a forgotten stepchild, and the U.S. tire maker never properly could leverage its value.
Fast forward 16 years, and the global landscape has changed. Goodyear no longer is chasing the dream of being No. 1, and it no longer is as necessary to have a partner to build up around the world.
So for these two once-close partners, it's probably best to split up and go forward on their own.
This editorial appeared in the June 15 print edition of Rubber & Plastics News, an Akron-based sister publication of Tire Business.