AKRON — Goodyear Chairman, CEO and President Richard Kramer told Yahoo Finance this week the tire maker's volumes are close to pre-pandemic levels in several markets.
"We are close. It depends around the world," Mr. Kramer said in an interview posted on the web service provider's finance website.
"I would say on the replacement markets in China, for example, we're past it," he said.
"The OE business is still down, but overall in the U.S. — we're still down 8% vs. 2019 levels and thats pre our acquisition of Cooper and adding their volume to it — but that's largely driven by the OE business."
The original equipment business, Mr. Kramer said, has declined as auto makers struggle to produce new vehicles with a shortage of materials, particularly computer chips.
The benefit of the downturn in OE business, Mr. Kramer said, is Goodyear's "ability to service our replacement customers more robustly. All channels, distributors and retailers saw inventories go down (in the second quarter)."
Goodyear recently reported solid operating income for the quarter and half year ended June 30 on higher sales, attributing that to "above-market" growth in many sectors and the addition of three weeks of sales from Cooper Tire & Rubber Co.
Goodyear's "merger-adjusted" segment operating income of $349 million contrasts with an operating loss of $431 in the corresponding 2020 quarter and was nearly 60% higher than the second quarter of fiscal 2019.
Second-quarter sales jumped 85.3% to $3.98 billion, driven by higher volume, the addition of Cooper results, increased sales from other tire-related businesses and favorable foreign currency translation. The company returned to the black on a net basis with income of $67 million, which contrasts with a net loss of $696 million a year ago.
Mr. Kramer told Yahoo Finance the Cooper acquisition "solidifies the company as a leader in the global tire industry. For consumers and customers they get a strong product in the light truck market, which is one of the fastest growing segments of the auto industry. From a balance sheet or financial perspective, we actually improve our leverage — it gives us more scale and gives us more earnings moving forward. And that actually helps us with some of the investments we need to make in the technologies that we see coming down the road."
He said the commercial market continues to be strong. And with miles driven increasing, Mr. Kramer said consumers are replacing tires at a robust pace.
"The worst we saw on treadwear was in the Great Recession," he said. "We saw cords coming through a lot. It has not been as bad now. I think people are saying I am getting out and driving, and my tires are key to the safety of the family and they are replacing tires right now. There is pent-up demand."
