Goodyear Releases Monthly Investor Update
AKRON, Ohio, Aug. 22, 2003 -- 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.
July Operating Highlights
North American Tire
- Industry shipments of consumer replacement tires grew 7 percent from
last year's levels. Goodyear shipments of consumer replacement tires
increased more than the industry compared with last year. Driven by
continued strength in the dealer channel, Goodyear and Dunlop brand
tires both gained market share year-over-year.
- In July, industry shipments of consumer tires to original equipment
manufacturers declined 10 percent from July 2002 levels. Goodyear's
shipments of consumer tires to OEMs declined more than the industry,
consistent with the company's strategy of being selective at OE.
- Industry shipments of commercial replacement tires declined 8 percent
in July from last year's levels. Goodyear gained share in the
commercial replacement tire market although the product mix was less
favorable within the Goodyear brand.
- Goodyear shipments of original equipment commercial tires increased
while industry shipments declined 4 percent in July compared with year-
ago levels.
- Segment operating income declined year-over-year due to significantly
higher raw material costs. Conversion costs were impacted by lower
production volume and higher wage and benefit costs.
- The company announced that a tentative agreement was reached with the
United Steelworkers of America on Wednesday, August 20.
European Union
- In July, industry shipments of replacement tires increased 9 percent
for consumer tires and 2 percent for commercial tires compared with
prior year levels. Goodyear consumer tires gained market share
compared with 2002 due to strong sales in Germany. Goodyear gained
market share in replacement commercial tire shipments due to strong
sales in Germany, France, Spain and Portugal.
- Industry shipments of OE consumer tires declined 6 percent from July
2002 levels. Goodyear OE consumer tire shipments declined less than
the industry.
- Industry OE commercial tire shipments grew 4 percent from July 2002
levels. Goodyear shipments of OE commercial tires increased
significantly in July 2003 compared with July 2002.
- Lower conversion costs from factory restructuring and improved volume
were partially offset by higher raw material costs resulting in
increased segment operating income.
- The Euro weakened against the dollar in July by 1.2 percent.
Eastern Europe
- Consumer replacement and original equipment tire unit sales for
Goodyear were up significantly compared with July 2002. The
replacement consumer tire growth was driven by continued improvement in
Central and Eastern Europe and Russia.
- Goodyear tire sales in the commercial replacement and OE markets grew
almost 10 percent in July.
- Segment operating margin continues to increase due to improved pricing
in Turkey and stronger winter tire sales in Central and Eastern Europe
and Russia. Price increases continue to outpace raw material cost
increases.
Latin America
- Combined with an improved sales mix, Goodyear consumer replacement tire
shipments increased slightly in July 2003 versus July 2002.
- Replacement commercial tire continues strong and above last year's
levels.
- Original equipment tire sales declined due to Goodyear's selective OE
strategy and reduced production by vehicle manufacturers in the region.
- Segment operating profit improved due to favorable product mix and
pricing partially offsetting the adverse impact of raw material costs.
- The Brazilian Real devalued 2.8 percent in July.
Asia
- Goodyear original equipment tire shipments for July increased
significantly from 2002 levels due to strong sales in China and
Thailand.
- Replacement tire shipments for Goodyear declined in July 2003 compared
with July 2002 due to lower sales in Malaysia and the Philippines.
- Segment operating income declined year-over-year due to higher raw
material costs, offsetting favorable price/mix.
Engineered Products
- Sales increased compared with July 2002 due to strong sales in
military, industrial and replacement products.
- Operating income improved as a result of lower production costs and
improved product mix.
- Engineered Products will discontinue operations at its Cartersville,
Georgia, fabric plant by October 1, affecting 120 jobs. The plant,
operated by Goodyear since 1929, has been a primary fabric supplier to
the company's North America conveyor belt facilities. It has also
supplied fabric for automotive coolant hose and air spring production.
Chemicals
- Segment operating income improved on significantly higher sales.
Increased pricing was partially offset by higher raw material and
energy costs.
Corporate News
- Stephanie K. Wernet was named vice president, information technology.
Wernet, 35, will report to Robert W. Tieken, executive vice president
and chief financial officer. Since January 2003, Wernet has been
director of customer affairs for the company's North American Tire
business. She joined Goodyear in 2001 as North American Tire's
director of e-business from EyeVelocity Inc., where she served as vice
president, e-commerce.
- Goodyear has had a number of new tire introductions this month:
- The Two Piece Assembly for off-the-road use is being initially
offered for large haulage trucks. It offers many benefits such as
reduced downtime from tire changeovers, higher payload
capabilities, improved traction, handling, stability and ride on
haul trucks, increased productivity and cost savings. The Two
Piece Assembly consists of a separate casing and a treadbelt
package. The two pieces have grooves that interlock during
assembly. Once assembled, the two pieces are held together by the
air pressure in the inflated assembly.
- The Asia region featured its Goodyear Ducaro GA premium passenger-
car tire, a product of Trinuum Tire Technology. The new tire
capped a flurry of product introductions in Asia under the Trinuum
umbrella. Ninety percent of Goodyear Asia's tire line has been
introduced in the past three years. This new-tire influx has
helped the segment achieve unit volume growth of 8.4 percent in the
first half of 2003 compared with 2002. The Ducaro GA features a
unique technology called Bubble-Blade II System for added traction
and quietness.
- A new winter tire from North America, the Eagle Ultra Grip GW-3,
provides sure grip for high-performance driving in all winter
conditions. The tire features Goodyear's innovative V-TRED
technology, which aids in dispersing water and slush from the
treadface. New 3D-BIS technology provides high tread blade density
and additional biting edges while maintaining block stiffness.
This translates into increased grip in snow and ice, but with
controlled wet and dry steering stability. A rim flange protector
helps to protect expensive custom wheels from potential curb and
pothole damage.
- The new Goodyear Eagle GT-HR is another product that benefits from
unique race-inspired design elements. A new feature, RaceWrap
construction technology, evolved from the way Goodyear develops
tires for NASCAR racing. The Eagle GT-HR has a ply that wraps from
the center of the tread down around the bead, up the sidewall and
back up under the steel belts. The H-speed-rated tire comes with a
50,000 mile warranty.
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.
This Newsletter may contain forward-looking statements based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed by such statements. These risks and uncertainties include price and product competition, customer demand, the ability to control costs and expenses, general industry and market conditions and general domestic and international economic conditions, including interest rate and currency fluctuations and other risks described in Goodyear's filings with the Securities and Exchange Commission.