What Is The Future For Goodyear?
Four years ago: In an interview at the Geneva Autoshow, Goodyear CEO Sam Gibara put forward his views. Goodyear had, according to him, the best people, the best distribution, the most cost-effective plants, the best products and – with its innovative EMT tyres – a three-year lead over its competitors. Within three years, he predicted, 75% of Goodyear tyres produced would be EMT tyres (in 2002, the actual figure was one million tyres).
The IMPACT production process (Integrated Manufacturing Precision Assembled Cellular Technology) was held up as a revolutionary advance, guaranteeing predominance over the competition and an example of Goodyear’s technical leadership.The reality is that there have been no significant profits for years and Goodyear is still in third place. It made a loss of $203 million in 2001 and might not have been able to avoid another loss last year.
Goodyear needs a turnaround in its loss-making home market, costs are too high, selling prices are too low and the once-proud corporation is fighting for nothing less than its survival, however unpalatable this might sound to company managers.In the first two years under Gibara’s leadership, Goodyear enjoyed very good results, but these have since declined to today’s levels and the “Mission into the 21st century” has been a flop. The group is overloaded with a mountain of debt, has big problems with its underfunded pension fund and the credit rating was reduced to junk bond status.
All this means no picnic for Gibara’s successor Keegan, who knows that his assignment is a difficult one but who believes that the problems are manageable. What he does not know for sure is whether he will have time enough to make the turnaround happen..