AKRON—The spread of the coronavirus has hit the entire automotive supply chain. Tire makers are no different.
"Our first quarter results were affected significantly by the sharp declines in demand in the wake of the COVID-19 pandemic," Richard J. Kramer, Goodyear chairman, CEO and president of Goodyear, said during a telephone press conference.
Goodyear's demand, he said, fell 15 percent compared to last year.
It its first quarter 2020 earnings report, released April 30, the tire maker notes that sales were $3.1 billion, down 15 percent from 2019. The decline, it said, "was driven by lower industry volume and unfavorable foreign currency translation."
Goodyear's first quarter 2020 net loss was $619 million ($2.65 per share) compared to a net loss of $61 million (26 cents per share) from a year ago. The increase in net loss was driven by discrete tax charges, a decline in segment operating income, and a non-cash goodwill impairment charge, partially offset by lower rationalization charges, the company said.
Tire unit volumes totaled 31.3 million, down 18 percent from the prior year's period.
Replacement tire shipments declined 16 percent, driven by "a severe contraction in industry demand following shelter-in-place mandates and sharp declines in consumer confidence," the company said.
"While this unprecedented crisis continues to disrupt our business and the broader automotive industry, I am confident we will emerge from this crisis in a strong position," Kramer said. "We have taken swift actions to aggressively reduce expenses and investment levels, while at the same time continuing to focus on our strategic priorities."
Part of Goodyear's pandemic response included idling manufacturing plants across the globe. U.S. plants were idled March 18 and slowly are restarting, the company said.
Kramer said Goodyear has begun the steps of a "phased restart" of manufacturing plants in the U.S., but the decision to resume production will be based on market demand signals, inventory and supply levels, as well as its ability to keep its associates safe in light of the COVID-19 pandemic.
Idling plants, Kramer said, "ensures we can protect our associates and help mitigate the effects in the steep drop in industry demand."
Kramer said key raw material suppliers were operating, and Goodyear is prepared to have the inventory it needs when production ramps back up.