Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
  • Tire Business
web
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • Silicone
    • Latex
    • Coronavirus
    • Executive Action
    • Government/Legal
    • Opinion
    • Technical Notebooks
    • Women in Tire & Rubber
    • ITEC
    • International Elastomer Show
    • HEXPOL Sponsored Content
    • Israel's Tactile Mobility launches tire insight technology
      Bidirectional EVs could lend a hand in power crisis
      WDK: German rubber industry set for double-digit growth in 2021
      Dana acquires electronics and software provider Pi Innovo
    • Israel's Tactile Mobility launches tire insight technology
      Goodyear joins EASE Logistics, Ohio city to launch connected mobility pilot program
      Goodyear to raise prices on passenger tires
      Ryan Patterson to lead Goodyear-Cooper integration efforts
    • Smithers opens doors to new medical device testing lab
      Maine's Poly Labs doubles work force
      Foam shortage a major concern for auto makers, seating suppliers
      New Products: Kraiburg launches advanced, ‘supersoft' TPEs
    • Emerald to close Illinois rubber additives site
      Smithers opens doors to new medical device testing lab
      Dana acquires electronics and software provider Pi Innovo
      Gelest's Barry Arkles enters National Academy of Engineering
    • Gelest's Barry Arkles enters National Academy of Engineering
      ECO starts 'first' U.S. silicone rubber recycling plant
      New legacy taking shape at Stockwell Elastomerics
      Fenner opens new textile treatment line in Pennsylvania
    • Ohio firm focuses on making better masks in U.S.
      U.S. to increase NBR, make gloves using Defense Production Act
      Tire Cologne canceled; rescheduled for 2022
      Tire Technology Expo canceled for 2021
    • Ryan Patterson to lead Goodyear-Cooper integration efforts
      New legacy taking shape at Stockwell Elastomerics
      Davis-Standard promotes Andrew Alaya to aftermarket sales role
      Harwick Standard adds Flores to West Coast sales team
    • Bidirectional EVs could lend a hand in power crisis
      Braskem Idesa reopens PE complex in Mexico with new contract
      To boost U.S. microchip production, Biden administration must find supply chains weaknesses
      TIA among associations against increase to minimum wage
    • Column: Value is the stuff in custom mixing
      New legacy taking shape at Stockwell Elastomerics
      Column: Discussions of race, equality may mean uncomfortable moments
      Column: Business trips possible because of essential workers
    • Part 2: Studying RPA ASTM methods for detecting compound quality differences
      Studying RPA ASTM methods for detecting compound quality differences
      Damage mechanism in oil and gas formulations during downhole testing
      Advancements in synchronous drive belt design for industrial and consumer markets
    • Rubber Division introduces WORD webinar series
      WORD panelists say evolution, authenticity keys to success
      New video celebrates women in rubber industry
      ITEC panelists say women can thrive in tire industry
    • Goodyear recognized by Lockheed Martin as 'elite supplier'
      EV tire advancements to help secure future
      Lambillotte: Only question on AVs is timing
      CAR official says EV future brighter than autonomous
    • Rubber Division introduces WORD webinar series
      Rubber Division seeks abstracts for 200th Technical Meeting
      WORD panelists say evolution, authenticity keys to success
      IEC keynote: Communication key to logistics
    • Sponsored By HEXPOL Compounding
      Faster Access to Your Polymer Compounding Experts Around the World
      Sponsored By HEXPOL Compounding
      Take a walk thru a HEXPOL Lab
      Sponsored By HEXPOL Compounding
      HEXPOL offers a unique selection of High Performance Elastomers to match your application requirements
      Sponsored By HEXPOL Compounding
      It’s what you can’t see that makes the Difference at HEXPOL
  • Blogs
    • Products
    • Wacky World of Rubber
    • New Products: Kraiburg launches advanced, ‘supersoft' TPEs
      New Products: Mahr Inc. introduces MarForm MMQ 500 Form Tester
      New Products: Starrett expands field-of-view for multi-sensor vision system
      New Products: Nova thinks outside the box with sealing tech
    • Wacky World of Rubber: How Trelleborg, teens sealed a spot in the world record book
      Wacky World of Rubber: Of chicken and feet, but not chicken feet
      Wacky World of Rubber: Time to go mattress shopping
      Wacky World of Rubber: Because nothing says football like 'frunk' shrimp
  • Newsletters
    • Rubber in Automotive
    • Silicone News
    • Latex News
    • Sign Up for Newsletters
    • Israel's Tactile Mobility launches tire insight technology
      Bidirectional EVs could lend a hand in power crisis
      WDK: German rubber industry set for double-digit growth in 2021
      Dana acquires electronics and software provider Pi Innovo
    • Gelest's Barry Arkles enters National Academy of Engineering
      ECO starts 'first' U.S. silicone rubber recycling plant
      New legacy taking shape at Stockwell Elastomerics
      Fenner opens new textile treatment line in Pennsylvania
    • Top Glove eyes new expansions with Hong Kong listing
      Sri Trang Gloves starts major capacity expansion
      Synthomer dismisses takeover reports
      Combined Goodyear-Cooper Tire company has tire technology, sustainability edge
  • Multimedia
    • Videos
    • Photo Galleries
  • Directory
  • Resources
    • Classifieds & Mold Mart
    • Sponsored Content
    • White Papers
    • HB Chemical
      Sponsored By HB Chemical
      The HB Chemical and Ravago Partnership: Taking Customer Service to a New Level
      Sponsored By HB Chemical
      Above and Beyond with HB Chemical
      Sponsored By HB Chemical
      The Company Behind the Inventory
      Sponsored By French Oil Mill Machinery
      Process Improvement, Cost Reduction with Custom Press Systems
    • Sponsored By Uncountable Inc.
      Labs of the Future: How to Choose a Laboratory Information Management System in 2021
      Sponsored By Uncountable Inc.
      Cooper Standard deploys lab informatics platform to synchronize R&D
      Sponsored By Elkem
      LSR Select™: A solution to improve your financial impact in molding applications
      Sponsored By HEXPOL Compounding
      Peroxide Cureable Silicone Injection Molding
  • Data
  • Events
    • RPN Events
    • RPN Livestreams/Webinars
    • Industry Events
    • Past Events
    • ITEC Library
    • International Silicone Conference Library
    • 2021 Healthcare Elastomers Virtual Edition
      2021 Rubber in Automotive Virtual Edition
      2021 International Latex Conference Virtual Edition
      2022 ITEC
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
July 17, 2008 02:00 AM

Goodyear plans big investment

Kathy McCarron
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    NEW YORK (July 17, 2008) — Goodyear, emboldened by its business turnaround over the last five years, plans to spend as much as $1.8 billion to modernize its plants, cut production costs and boost its share in emerging markets.

    The tire maker also plans to continue launching new products and wants to increase its high-value-added tire capacity in the coming years.

    Following several years of restructuring and retrenching, Goodyear said it now has the financial flexibility to pursue profitable growth strategies. These include focusing on emerging markets, particularly China, Russia and Brazil, and increasing its global market share in high-value-added tires.

    At an investors conference in New York June 26, Goodyear said it will spend $1.6 billion to $1.8 billion at its plants in the U.S., Latin America and Europe over several years to modernize and upgrade capacity for high-value-added tires.

    This is expected to add about 8 million units per year of such consumer tire capacity, primarily by converting existing low-value-added tire production. Commercial truck tire capacity also will be expanded by 2.5 million units by 2012.

    What's an HVA tire?

    Goodyear defined high-value-added tires as “H” or higher speed-rated passenger tires with rim diameters 17 inches or larger made with silica or multizone tread compounds, segmented molds and presses ranging in size of 45 inches or larger. Goodyear's HVA commercial tires, such as its Fuel Max and Duraseal lines, offer specific performance characteristics and its off-the-road HVA lines use technology to address difficult performance conditions.

    The company said it is targeting the HVA tire market because of growing demand in emerging markets and expected incremental margins of $10 to $20 per tire. However, the company acknowledged the challenges of producing HVA tires vs. LVA tires, including the investment in new equipment, transition costs, shorter runs and more sizes.

    In the U.S., Goodyear is budgeting $500 million to $700 million over five years to modernize plants in Gadsden, Ala.; Fayetteville, N.C.; Topeka, Kan.; and Danville, Va.

    The tire maker said it also is transitioning its supply chain from “pushing” products from its plants to “pulling” product orders from them based on consumer demand. Chairman and CEO Robert Keegan said the goal is to attain a more cost-efficient supply chain that reduces inventory and improves fill rates.

    Full agenda

    Goodyear also announced:

    c The planned closing of its 47-year-old passenger and light truck tire plant in Somerton, Australia, completing its targeted reduction, announced two years ago, of about 25 million units of capacity in high-cost facilities. Goodyear will take a charge of $125 million against earnings to cover the closing, which will provide $35 million in annual cost savings.

    c A plan to invest up to $500 million to relocate and expand its Dalian, China, plant to a new site 30 miles away. The new facility, with an anticipated production start-up in 2012, will increase high-end passenger tire capacity and launch the company's truck tire production in China. Goodyear has 75-percent ownership of the plant.

    c The allocation of up to $600 million to expand production in Brazil and Chile.

    c The budgeting of about $500 million to modernize and expand output at plants in Germany and Poland.

    These production adjustments and investments should help the firm increase its HVA capacity by 50 percent from 2006 levels. The goal is to have half of the company's global capacity located in low-cost countries by 2012, Keegan said.

    Goodyear assured investors that the company is on track with its four-year plan to attain more than $2 billion in gross cost savings by 2009.

    Keegan said the firm's recent price hikes have held in the U.S., and Goodyear is focusing on a price and product mix plan to offset rising costs.

    Some stock analysts were guardedly optimistic about Goodyear's plans in the midst of rising raw material costs and slowing economic conditions. KeyBanc Capital Markets Inc.'s Saul Ludwig issued an analysis that kept the company's rating of Goodyear stock at “buy” but lowered his estimated earnings per share for the year to $2 from $2.45.

    “As we see it, Goodyear is in good control of its operations and, in light of the environment, is executing its strategy well and should have a strong recovery whenever the economic winds turn, although timing that is impossible,” he said.

    J.P. Morgan Securities Inc. maintained its “hold” rating on Goodyear stock with an estimated EPS of $2.60 for 2008. It noted that in Latin America, two-thirds of Goodyear's revenue mix is high-margin truck tires and the firm's new plant in China will give it access to that nation's large and high-margin commercial truck tire market,

    At the investor conference, Goodyear also warned that the tough economy and weak tire demand will put pressure on its earnings. The following day, the firm's share price declined 11.1 percent.

    Letter
    to the
    Editor

    Rubber & Plastics News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber & Plastics News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber & Plastics News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    web
    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Contact the Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • Silicone
      • Latex
      • Coronavirus
      • Executive Action
      • Government/Legal
      • Opinion
      • Technical Notebooks
      • Women in Tire & Rubber
      • ITEC
      • International Elastomer Show
      • HEXPOL Sponsored Content
    • Blogs
      • Products
      • Wacky World of Rubber
    • Newsletters
      • Rubber in Automotive
      • Silicone News
      • Latex News
      • Sign Up for Newsletters
    • Multimedia
      • Videos
      • Photo Galleries
    • Directory
    • Resources
      • Classifieds & Mold Mart
      • Sponsored Content
      • White Papers
    • Data
    • Events
      • RPN Events
      • RPN Livestreams/Webinars
      • Industry Events
      • Past Events
      • ITEC Library
      • International Silicone Conference Library
    • Advertise
    • DIGITAL EDITION