Goodyear, the world’s largest tiremaker, is focusing on an aggressive strategy for profitable growth and a turnaround in financial performance in 2000, the company’s top executive told its shareholders today.
This turnaround has already begun, according to Samir G. Gibara, the company’s chairman, CEO and president. “Early indicators show encouraging signs that our strategy is working,” he said.
“As we move through the second quarter and the rest of 2000, we must continue to push forward on the execution of our plans and focus as never before on delivering the growth and profitability this global company is capable of and that you, our shareholders, expect,” Gibara said at the company’s annual shareholders meeting.
Much of this growth, he said, will come from the more-profitable replacement tire market rather than sales to automakers. “Going downstream and getting closer to the final user of our products is where the future of this company lies.”
During 2000, he said Goodyear’s business plans call for: concentrating on sales growth in existing businesses, enhancing product and service quality, solidifying customer relationships, completing the Dunlop integration, upgrading its global operations and increasing productivity — all with the objective of substantially improving financial performance.
“To be the low-cost producer, we must utilize global product sourcing to reduce unit costs and improve our margins.”
Goodyear, he said, will capitalize on its global leadership position to introduce new products, expand distribution, rationalize production, improve productivity and increase prices. The tiremaker has been aggressive in increasing prices this year to offset fast-rising raw material costs. “Our objective is to protect our margins by staying ahead of the material cost increase curve,” Gibara added.
“Topping the ‘to do’ list on our corporate strategies action plan for 2000 is the continued integration of Sumitomo/Dunlop,” he said. “So far, the anticipated savings are on target and synergies are slightly ahead of schedule. During 2000, we expect to capture $116 million, up from our original target of $110 million. These synergies will come from purchasing and manufacturing, primarily in Europe.”
As always, the global economy will impact Goodyear’s 2000 results, according to Gibara. The company’s outlook for the coming year includes “strong but slowing U.S. growth, improving fundamentals in Europe, progressive improvement in Latin America, the recovery in Asia gaining hold and the commodity and agricultural businesses remaining under pressure.”
Goodyear is the world’s largest tire company. Headquartered in Akron, Ohio, the company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 27 countries. It has marketing operations in almost every country around the world. Goodyear, with the addition of its Dunlop tire joint ventures, employs more than 105,000 people worldwide.
(This news release contains certain forward-looking statements based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed by such statements. These risks and uncertainties include price and product competition, customer demand for the company’s products, the ability to control costs and expenses, general industry and market conditions and general domestic and international economic conditions, including interest rate and currency fluctuations. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.)