Goodyear Releases Monthly Investor Update
AKRON, Ohio, June 23 -- Goodyear's Investor Relations department today published its monthly update for the sole purpose of providing information to individuals interested in tracking Goodyear's progress on a more frequent basis. This is not a general update of material developments concerning Goodyear .
May Operating Highlights
North American Tire
- Industry shipments of consumer replacement tires declined almost 4
percent from last year's levels. Goodyear shipments of consumer
replacement tires increased over last year. Goodyear-branded tires
were especially strong through the dealer channel.
- Industry shipments of commercial replacement tires in May were up 8
percent over last year's levels. Goodyear gained share in the
commercial replacement tire market.
- In May, industry shipments to original equipment manufacturers declined
8 percent from a year ago for consumer tires. Goodyear's shipments of
OE consumer tires declined more than the industry, consistent with the
company's strategy of being selective at OE.
- Goodyear gained market share in original equipment commercial tires
where industry shipments declined 5 percent in May compared with a year
ago levels.
- Segment operating income declined due to unfavorable raw material,
price/mix and conversion costs, partially offset by lower personnel
and development costs. The unfavorable price/mix was partially due to
a shift in brand mix in commercial truck tires as well as more
purchases of trailer tires.
- The company announced that the Kelly brand will be expanded into the
OEM market. Kelly fitments will be limited to selected American-made
autos. Kelly will be the only American-owned branded tire at original
equipment that is sold and distributed solely by independent tire
dealers.
European Union
- In May, industry shipments of replacement tires increased 1 percent for
consumer tires and declined 1 percent for commercial tires compared
with prior year levels. Goodyear consumer tires gained market share
compared with 2002 due to strong sales in Germany, Spain, Greece,
Benelux and Portugal. Goodyear commercial tire shipments declined more
than the industry due to exiting marginal business in the United
Kingdom.
- Industry shipments of OE consumer tires declined 4 percent from May
2002 levels. Goodyear OE consumer tire shipments declined less than
the industry due to strong sales at BMW, Mercedes, Audi and Chrysler.
- Industry OE commercial tire shipments were 2 percent lower in May 2003
compared with 2002 levels. Goodyear gained share in original equipment
commercial tires.
- Lower conversion costs and a favorable price/mix offset higher raw
material costs resulting in higher segment operating income.
- Goodyear continues to work with European auto manufacturers on run-flat
tire programs for a variety of vehicles. During 2003, Goodyear expects
to supply more than 600,000 run flats to the OEMs, almost double the
number supplied in 2002.
Eastern Europe
- Consumer replacement tire unit sales for Goodyear were up significantly
compared with May 2002, driven by continued improvement in Poland and
Russia.
- Goodyear tire sales in the commercial replacement market were flat with
May 2002.
- Goodyear's original equipment tire sales in both consumer and
commercial segments increased significantly in May compared with 2002.
- Segment operating income improved over last year due to higher volume
and improved price/mix, which was partially offset by unfavorable raw
material costs.
- Strong volume growth in Poland is a result of restructured Polish sales
and marketing programs. The sales force is focused on a multi-brand
strategy that has fueled market share growth in Poland.
Latin America
- Goodyear consumer replacement tire sales declined slightly in May 2003
versus May 2002. Profitability in the consumer segment improved due to
higher sales in high performance tires versus the same period last
year.
- Replacement commercial tire sales declined slightly as a result of
lower bias truck sales, partially offset by an increase in farm and
radial truck tire sales.
- Original equipment tire sales declined due to reduced demand and
Goodyear's selective OE strategy.
- Segment operating income improved due to favorable price/mix partially
offset by higher raw material costs and unfavorable translation.
- The Brazilian Real devalued 2.6 percent in May. For the quarter, the
Real has revalued 11.4 percent. The Mexican peso has also revalued
4.5 percent in the quarter.
Asia
- Goodyear original equipment tire shipments for May increased
significantly from 2002 levels due to strong sales in China.
- Replacement tire shipments for Goodyear were flat with 2002.
- Segment operating income was flat year-over-year due to higher raw
material costs offsetting favorable price/mix and higher volumes.
Engineered Products
- Sales declined compared with May 2002 due slow sales in replacement and
original equipment markets partially offset with stronger industrial
hose sales.
- Operating income improved slightly as a result of improved product cost
due to raw material substitution and lower labor and R&D expenses.
Chemicals
- Chemicals generated higher segment operating income on significantly
higher sales. Increased pricing was partially offset by higher raw
material and energy costs.
Corporate News
- Joseph M. Gingo has been named Goodyear's executive vice president,
quality systems and chief technical officer. Gingo, 58, has been
serving as Goodyear's senior vice president for technology and global
products planning since 1999. In addition to continuing to lead
Goodyear's Research, Tire Technology and Global Products Planning
groups, Gingo will lead three strategic initiatives for the company --
Six Sigma, Product Innovation & Development, and Quality Leadership.
He also retains responsibility for the company's global race tire
program.
- Chuck Sinclair has been named senior vice president, global
communications. He will be responsible for leading Goodyear's global
team of communications professionals in the execution of a
communications strategy and providing counsel to senior leadership on
issues impacting the company. Sinclair previously served as vice
president, communications and public relations for North American Tire.
- Goodyear's display at the Paris Air Show features Goodyear radial tires
on the Airbus A320, Airbus A340-500/600, Boeing 737 and Boeing 777.
Goodyear announced three major long-term contracts for its bias-ply
aircraft tires - with FedEx Corp.'s global 350-plus jet fleet,
ExpressJet Holding's 200 aircraft and American Airlines' 362 Boeing MD-
80 jets.
- Goodyear Engineered Products has been given one of the U.S. Army's most
prestigious awards for manufacturing and engineering achievement-the
Outstanding Value Engineering Contractor award for 2002. The award was
based on a Value Engineering change Proposal that saved Goodyear and
the U.S. government $5.8 million over three years. Engineered Products
is the only supplier in the world that has been able to pass the
stringent laboratory and field-testing requirements for the track used
on the Army's M1A2 Abram tank.
- Goodyear run-flat tires recently wowed European journalists at a
General Motors-hosted event at a French racecourse celebrating the 50th
anniversary of the Chevrolet Corvette. Journalists drove a
commemorative edition Corvette with inflated Goodyear EMT tires, then
with one tire deflated on a handling course. Goodyear's position as
the exclusive Corvette tire for 25 years led to the invitation to make
presentations on Goodyear's involvement in racing, technology transfer
to street tires, Corvette tires and Extended Mobility Technology (EMT).
Goodyear first supplied tires to Corvette in 1963, and became an
exclusive supplier in 1978 on the C3 model.
Goodyear is the world's largest tire company. Headquartered in Akron, Ohio, the company manufactures tires, engineered rubber products and chemicals in more than 85 facilities in 28 countries. It has marketing operations in almost every country around the world. Goodyear employs about 92,000 people worldwide.