Goodyear Monthly Investor Update
AKRON, Ohio, March 20 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, February Year-to-Date
North American Tire
Through February, industry shipments of consumer replacement tires to dealers/distributors were 8 percent above last year's levels. Goodyear shipments to dealers were almost flat. Industry shipments were driven by competitor dealers pre-buying ahead of price increases. Goodyear dealers postponed purchases in January and February as some pre-bought in December and industry retail demand was weaker than expected. Additionally, some Goodyear distributors delayed purchases due to modifications in the company's distribution model. As part of the Ford tire replacement program, through February, Goodyear shipped about 400,000 tires. Through February, industry shipments of commercial replacement tires were up 14 percent from last year's levels. While increasing year-over-year, shipments are still well below historical levels. Goodyear's shipments of commercial replacement tires were also up but not as much as the industry due to pre-buying by competitor dealers in advance of price increases. Through February, industry shipments to original equipment customers were up 10 percent from a year ago for consumer tires and down 17 percent for commercial tires. Goodyear's unit shipments were better than the industry. As previously discussed, operating income in the first quarter of 2002 will be negatively impacted by approximately $80 million versus the first quarter of 2001 due to substantial production cutbacks made in the fourth quarter. Due to fixed contracts, declines in petrochemical raw material prices at the end of 2001 are anticipated to positively impact operating profit beginning in the second quarter. European Union
Through February, industry replacement tire shipments were up almost 3 percent for consumer tires and down almost 6 percent for commercial tires compared to prior year levels. Goodyear consumer shipments were below industry levels, while commercial shipments generally reflected industry shipments. Industry and Goodyear OE consumer tire shipments were up compared to prior year while industry and Goodyear OE commercial tire shipments were down. As previously discussed, operating income in the first quarter will be negatively impacted by approximately $15 million due to production cutbacks made in the fourth quarter. The euro, at 0.86 to the U.S. dollar in February, has weakened almost 3 percent this year. Eastern Europe
Replacement tire unit sales for Goodyear were up from February year-to-date 2001, primarily due to overall market recovery in South Africa and Turkey. Through February, OE tire unit sales for Goodyear were down slightly from last year due to continued softness in the Polish automotive industry. Increased replacement volume and positive effects from higher prices and improved mix have improved operating performance over last year. Latin America
February year-to-date replacement tire unit sales were down from last year, primarily in Brazil and Argentina, due to weak economic conditions. OE tire unit sales were up from last year. Higher prices and mix improvements were offset by reduced volume and currency devaluation. Currencies revalued in Brazil and Mexico but were offset by devaluation in Argentina and Venezuela, (23 percent and 38 percent respectively) negatively impacting operating earnings and the foreign currency exchange line of the income statement. Asia
February year-to-date replacement tire unit sales were up from last year while OE unit sales were down slightly. Improved volumes in China and India, better mix and cost reductions have improved operating margins versus last year. Engineered Products
Strong military shipments and improved OE demand for automotive hoses and power transmission products were offset by weakness in industrial sales of belts and hoses. Chemicals
Improved raw material prices, lower energy costs and cost reduction programs have improved operating margin. Corporate News
Goodyear and Siemens VDO Automotive Corp. have developed a new software program that can interpret tire and vehicle data together as part of the companies' ongoing relationship. The software can interpret a multitude of vehicle parameters and calculate a recommended tire pressure based on data such as ambient temperature and pressure, tire load, speed and driving habits. Additionally, Goodyear has named Fujikura Ltd., based in Tokyo, Japan, as a preferred supplier of sensor microchips for low-pressure warnings systems it is developing with Siemens VDO. Robert J. O'Leary has joined Goodyear as senior vice president, global communications. O'Leary, 51, will be responsible for developing and executing a global communications strategy. He comes to Goodyear with an extensive background in public relations, brand management and corporate advertising for major multinational corporations. For four years until 2000 leading up to the merger with Exxon, he led the global communications function for Mobil Corp. Sanjay Sivanandan has joined Goodyear as marketing director in the Asian tire business. Sivanandan, 35, has 12 years experience in consumer product purchasing, sales and marketing in Europe and Asia. He joined Goodyear from Mars Inc., where he was the market development director for its operations in India. Jeanne B. Sherman has joined Goodyear as director of global marketing services. Sherman, 44, has more than 20 years experience in sales, marketing strategy, brand management, global advertising and product promotion. She joined Goodyear from Payless Shoesource, where she most recently was director of global advertising, women's marketing and new ventures. 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 28 countries. It has marketing operations in almost every country around the world. Goodyear employs about 96,000 people worldwide.