Goodyear Releases Monthly Investor Update
AKRON, Ohio, May 22 Goodyear's Investor Relations
department today published its monthly update for individuals interested in
tracking Goodyear's progress on a more frequent basis.
Operating Highlights
North American Tire
* In April, industry shipments to the replacement market were 6 percent
below last year's levels for consumer tires. Goodyear shipments in
total in the consumer replacement market also were down in April, but
less than the industry. Shipments of the Goodyear brand only to the
consumer replacement market were up in April versus last year.
* Industry shipments in April to the commercial replacement market were
4 percent below last year's levels. Goodyear shipments in total in the
commercial replacement market were up almost 4 percent, continuing the
gains made in the first quarter.
* In April, industry shipments to the original equipment market dropped
7 percent from a year ago for consumer tires and 43 percent for
commercial tires. Goodyear's unit shipments generally reflected the
industry shipments.
* Goodyear made significant production cutbacks for consumer and
commercial tires in April. Very substantial production cutbacks also
will occur in May and June to reduce finished goods inventories.
Goodyear will continue to monitor demand levels and adjust production
accordingly.
* Natural rubber and petrochemical raw material prices in April were level
with the first quarter 2001, which was up approximately 3 percent year-
over-year. Energy costs remain high.
* The second price increase this year was announced May 15, 2001, for the
consumer replacement market effective June 15, 2001.
European Union
* In April, industry replacement sales were above last year's levels for
consumer and commercial tires. Goodyear shipments were slightly better
than the industry. April year-to-date industry volumes remain fairly
flat in both consumer and commercial markets.
* Industry original equipment consumer shipments in April were flat with
last year. Goodyear shipments were up from last year. Industry
original equipment commercial shipments in April were down almost 17
percent. Goodyear shipments of original equipment consumer tires were
up slightly over last year's levels.
* While volume has improved, costs have increased due to higher raw
material costs and significantly lower production volumes required to
balance inventories.
* The euro at 0.89 to the dollar at the end of April has weakened versus
fourth quarter 2000 levels.
Eastern Europe
* Replacement tire unit sales for Goodyear excluding Turkey were up
4 percent from April last year. Including Turkey, replacement sales
were essentially flat.
* Original equipment tire unit sales for Goodyear were down approximately
18 percent from April of last year due primarily to the substantial
decline in the Polish automotive industry.
* In the month of April the Turkish lira devalued approximately 14
percent. However, Goodyear continues to minimize the negative impact by
raising prices in the local market and increasing exports.
* Prices have been increased in South Africa effective April 1, 2001, and
in Morocco effective May 1, 2001.
Latin America
* April year-to-date replacement market volumes are essentially flat with
last year. However, product mix has improved. Original equipment
volumes through April were up significantly over last year.
* Operating results continue to be negatively impacted by a weaker
Brazilian real.
* Recent cost-cutting measures have improved margins.
Asia
* Original equipment shipments for April year-to-date were up
significantly over last year. However, slowing ASEAN GDP and political
uncertainty in Indonesia, the Philippines and Thailand have weakened
demand in the replacement market.
* Low-cost bias imports and weak exchange rates have affected margins.
Engineered Products
* Weak original equipment demand for automotive hoses and power
transmission products has negatively impacted sales volumes April year-
to-date. Conveyor belt sales have improved slightly over last year.
* Production cutbacks were necessary to balance inventories.
Chemicals
* Raw material prices have stabilized at first quarter levels. However,
raw material and energy costs are still significantly above 2000 levels.
Corporate Highlights
* A global rationalization program, involving staffing reductions of
7,200, was announced in February for implementation by year-end. In
April, Goodyear announced it had identified additional opportunities
under this program, which have increased the staffing reductions to
7,800. Through April, staffing levels were reduced by 5,500.
* On April 2, 2001, Goodyear elected Cathryn Fischer vice president and
chief marketing officer. Fischer is responsible for Goodyear's global
marketing and brand management efforts. She joined Goodyear from
Newell-Rubbermaid Inc., where she was vice president of marketing for
its largest business, the Rubbermaid Home Products group. Prior to
that, Fischer worked 14 years in marketing and general management
positions at The Procter & Gamble Co.
* On May 7, 2001, Goodyear announced the appointment of new leaders for
its two European-based tire businesses. Michael Roney has been named
president of the European Union business unit and Jarro Kaplan has been
named president of the Eastern Europe, Africa and Middle East business
unit. Roney had been president of Goodyear's Eastern Europe, Africa and
Middle East business unit since 1999. Kaplan had been managing
director of Goodyear Germany since 1999.
