Fundamental Strategic Changes Driving Goodyear Results

AKRON, Ohio, April 26 -- In his address to shareholders at The Goodyear Tire & Rubber Company's 2004 Annual Meeting, Chairman and Chief Executive Officer Robert J. Keegan said the tiremaker remains committed to the strategic direction implemented two years ago to fundamentally change the company.

"To succeed we knew we had to take a series of strategic, decisive and -- in some cases -- courageous actions," he said.

According to Keegan, those actions are defined by the "Seven Strategic Drivers" of the business: outstanding leadership, a lower cost structure, cash is king intensity, a fully leveraged distribution network, enhanced brand strength, product leadership and an advantaged supply chain. A focus on these areas has been at the heart of the company's efforts for the last two years and will drive its continued momentum, he said.

When assessing the company two years ago, Keegan said he knew Goodyear had considerable assets, and there were untapped opportunities in its markets.

"We started to drive fundamental change in our company that would leverage both our assets and the favorable market trends," he said. "We concluded that we could win if we made several core changes."

Keegan said the progress achieved in these areas has been critical, and results to date are gratifying:

   - Creating a richer product mix and increasing brand equity by
     accelerating the introduction of high-impact new products, starting
     with the Assurance family of tires in North America.
   - Rebuilding dealer relationships and focusing on building dealers'
     businesses.
   - Analytically and dramatically changing the allocation of capital by
     investing to create value and eliminating costs where little or no
     value creation was identified.
   - Increasing the earnings capacity of businesses that were doing well
     while working on the turnaround in the North American Tire business.
   - Taking steps to improve the balance sheet by extending debt maturities,
     thereby creating sufficient time to turn around the company.
   - Significantly improving the capabilities of the leadership team.

Keegan said the company remains committed to improving the core economics of its businesses and driving for significantly better market positions.

"Today, Goodyear is a refocused company," he said. "We have zero interest in mere survival. We are playing to win. And we are winning."

The company continues to successfully address its challenges, Keegan said, resulting in notable business achievements in 2004 including significant financial improvement, a return to profitability in North American Tire, and wide recognition for product innovation and performance.

"We are proud of these achievements, and we are mindful that they are the byproduct of the passion, courage and energy that our associates are putting into driving business success," he said. "The results are also further validation that fundamental change is taking place."

"The state of our company -- your company -- is improving steadily," Keegan told the shareholders. "We certainly have more challenges ahead of us, but I believe we are far better positioned to meet those challenges today than we were two years ago."

"I am very proud of the people of this company who are responsible for Goodyear's financial and market improvement," he added.

"There are dramatic changes taking place in our company today, and there are more to come tomorrow," he said. "We are still a work in progress," he said, "but we are now enjoying both the work and the progress."

Goodyear is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries around the world. Goodyear employs more than 80,000 people worldwide.