Goodyear’s transformation plan, intended to help the Akron-based tire company prosper in the next century, is moving forward more quickly than expected, company executives said Tuesday.
Chief Financial Officer Christina Zamarro said the Goodyear Forward plan is expected to benefit the company by $375 million this year, an increase from the expected $350 million benefit that was originally anticipated in 2024. The plan, announced last fall, is intended to optimize the company’s products and improve profits.
On the way to that improvement, the company lost $58 million in the first quarter of 2024 — better than the year prior, when it lost $99 million. New CEO and President Mark Stewart said strategies such as being more thoughtful about procurement and improving efficiencies in factories give Goodyear a solid base from which to grow. He also said Goodyear is going through a “tremendous amount of modernization” and is working to streamline those investments.
Goodyear: Selling more high-end tires
Goodyear is taking “very specific actions to increase profitability” on low-margin items, Stewart said. The company is also broadening its high-end offerings. With those changes and others, the company enjoyed its best first quarter for U.S. retail stores in five years during the first three months of 2024.
Stewart also said he’s leading an effort to reduce overtime and third-party spending.
“I’m excited about the improvements we’re providing for our future,” he said in a call with analysts after Goodyear’s earnings were released.
Job eliminations confirmed
Goodyear eliminated about 135 positions in the United States, Stewart said, and about 1,200 across Europe, the Middle East and Africa. He said the cuts were “required to right-size our cost structure.”
Zamarro, the company’s CFO, said inflation impacted Goodyear’s bottom line, adding that tire shipments declined. Business from companies that buy tires for their fleets of vehicles also weakened.
But Stewart said the business has “really strong momentum, great energy” and more cost competitiveness as the Goodyear Forward plan is implemented. In the United States, Zamarro said, there’s no evidence that tire consumers are trading down to cheaper products.
Stewart said as the company makes changes, the focus remains on shifting employee patterns and behavior, a point of emphasis Zamarro echoed.
“It is that behavioral change where what we’re emphasizing to the teams is when we get to a target, it’s not that we’ve necessarily done the job,” she said. “We’re going to continue to look for what else we can do. And I think it’s that never-satisfied mentality.”
