AKRON — For Goodyear, 2023 was a year with arguable highs — a 125th anniversary celebration, the ongoing integration of Cooper Tire & Rubber — and lows — natural disasters, fires, job cuts, plant closures and dissatisfied investors.
The moves promise to shape the world's No. 3 tire maker for decades to come.
That roller coaster of a year, capped by the Goodyear Forward reorganization plan and a departing CEO, is Tire Business' top news story of the year.
Goodyear disclosed its reorganization plan — created by the strategic and operational review committee of its board of directors — Nov. 15, the same day Chairman, President and CEO Richard Kramer announced his intention to retire in 2024 after 14 years of leading the company.
The plan, among other cost-cutting measures, calls for divesting the Dunlop brand, which has been part of Goodyear's portfolio since 1999, as well as its off-the-road tire and chemicals businesses. Shedding those would result in more than $2 billion in gross proceeds.
Goodyear's strategic and operational review committee was created July 25 in response to a letter from Elliott Investment Management L.P., a West Palm Beach, Fla.-based investment firm. The letter, sent May 25, outlined the firm's dissatisfaction with what it called Goodyear's poor stock performance.
Goodyear added three members to its board of directors in response.
Goodyear secured the rights to the Dunlop brand in North America and Europe as part of the dissolution of its global alliance with Sumitomo Rubber Industries Inc. in 2015. Dunlop is now sold primarily in Europe and the brand's sales represent about $700 million annually.
North American tire dealers contacted by Tire Business said they sell very little, if any, Dunlop tires, with Goodyear noting the divestment will have little impact on operations.
Goodyear's OTR business provides specialized tires for the mining and construction industries with annual revenue of approximately $700 million. It makes those products at its mixed-use Topeka, Kan., plant (that also makes light truck tires) and at its dedicated OTR plant in Tatsuno, Japan. The tires are made to a lesser extent at plants in Adapazari, Turkey, and Uitenhage, South Africa.
It's unclear how the divestment will impact the 77-year-old Topeka plant, in which Goodyear announced a five-year $125 million investment last year. The plant employs 1,600.
Goodyear started 2023 with cost-savings news. On Jan. 27, the firm said it was planning to trim its global salaried workforce by about 5%, or 500 jobs, by mid-year, citing an "uncertain" near-term economic outlook and a "significantly weaker" industry backdrop.
After Goodyear released its 2022 annual results, S&P Global Rating revised Goodyear's outlook to negative, from stable.
On April 11, a manufacturing plant in Tupelo, Miss., was hit by a tornado, idling operations at the plant for two months.
In May, Goodyear had a spot of good news with the announcement it was on target to achieve $250 million in synergy cost savings by mid-2023 from the integration of Cooper, roughly 50% greater than envisioned when the deal was announced in early 2021.
Shortly after, Elliott Investment sent its letter demanding changes. In response, the price of a Goodyear share jumped 21% in heavy trading. Goodyear agreed to meet with the group, resulting in the Goodyear Forward plan among other changes.
In July, the U.S. Department of Labor and the Mexican government sided with an independent union in a labor rights case at Goodyear's passenger tire factory in San Luis Potosi, Mexico. The union said Goodyear violated workers' labor rights. The following month, workers at the plant approved joining the union.
Goodyear saw two tragedies during the summer: two Goodyear employees died Aug. 9 in a crash during tire testing at the Nurburgring race track in Germany; and in late July, a Goodyear worker died following an injury at its Texarkana, Ark., facility.
A fire in August damaged the curing area of Goodyear's tire plant in Debica, Poland, leading sales in the EMEA region to be cut by $40 million this year and operating income to be cut by as much as $30 million.
In September, Goodyear announced plans to cut 1,200 jobs throughout its Europe, Middle East and Africa region to make the business unit "leaner, more efficient and customer-centric," resulting in a possible savings of $100 million.
Also in September, Goodyear said it would retool its Asia-Pacific operations to a third-party distribution and retail sales model, with the goal of improving profitability in Australia and New Zealand. The plan calls for eliminating about 700 positions, exiting nine warehouses and selling about 100 retail and fleet locations in the region.