Mid-Year Report: Goodyear finding normalcy after COVID-19

Goodyear has begun "a phased restart of tire production," and the majority of its plants are making tires again, according to Mike Dwyer , chief customer officer for consumer tire in North America. In addition, Cary Budzinski, senior director for North America commercial sales, told Tire Business that the tire maker is seeing an increase in the use of retreads among fleets, as they look to maximize casings and postpone purchasing new tires.

How would you describe business thus far in 2020?

Dwyer: Like many industries, ours has suffered from the abrupt decrease in mobility around the world. Throughout the pandemic, we've faced many unexpected challenges—from a sharp drop in demand for tires to creating a virtual work force.

However, the past few months proved how truly essential our industry is in keeping the world's supply chain moving, delivering needed goods to communities and ensuring health care workers and others essential to public health and safety could continue to drive to and from work every day.

In this environment, we mobilized quickly to adapt, and we leveraged areas where we are well-positioned to meet consumers' current preferences for convenience and contact-free shopping. We saw an uptick in traffic on our e-commerce platforms, which allows consumers to research, shop and schedule tire installation right from their homes.

And at our network of company-owned retail locations, we initiated a "zero contact" service option to give consumers a convenient way to get their car serviced and eliminate common touch points throughout the process.

In our commercial business, we applied similar measures to serve fleet customers, offering "zero contact" options at our company-owned commercial tire and service locations, as well as free DOT inspections to help relieve some of the financial pressures we know fleets are facing to keep trucks on the road.

Despite the many challenges we are facing, we have been able to continue to grow our commercial business, launching our first commercial e-commerce partner program and announcing that we will become the preferred supplier of tires and retreads for Ryder System beginning in 2021, among other new business wins.

The pandemic also gave us a unique opportunity to step in and increase support for our communities, especially health care providers and foodbanks that are critical to supporting those impacted by COVID-19. As the situation continues to unfold, we will look for new ways to enable mobility and support communities where we operate.

What are some of the key changes the company has made in order to keep employees and customers safe during the COVID-19 pandemic?

Budzinski: Beginning with our Asia Pacific region, our teams demonstrated tremendous agility—adjusting our offices to a work-from-home model where possible. As the pandemic spread to the West, we applied the same measures in our EMEA (Europe, Middle East, Africa) and Americas regions.

In the U.S., our provision of tires and services to our customers was essential to keeping law enforcement, health care professionals and fleets on the road.

We quickly assembled a dedicated team that has been working tirelessly to ensure that our policies and protocols meet—and in some cases exceed—guidance from the Centers for Disease Control and Prevention in order to help protect the health and well-being of our associates who continued to work in our manufacturing plants, logistics centers and company-owned service locations across the Americas.

In all of our facilities, we are urging both associates and customers to increase hand washing, practice physical/social distancing and to avoid handshakes or other close personal contact.

Additionally, to help protect our customers, we have increased disinfection of all touch points and offer our "zero contact" service options at our company-owned consumer and commercial locations.

It has also been extremely important for us to remain close to our dealer and fleet customers throughout the pandemic, continuing to build on the strength of our relationships and maintaining our service and support for them.

Do you expect any supply difficulties in the second half of the year?

Dwyer: To help ensure we can continue to supply in-demand products to our customers, we have begun a phased restart of tire production and are currently manufacturing products in the majority of our facilities.

We are basing our production plans on an evaluation of market demand signals, inventory and supply levels, as well as our ability to help safeguard the health of our associates.

What are some of the pleasant surprises you are seeing in the industry?

Budzinski: I have been moved and inspired by the many businesses—from large to small—that have pooled their resources to help their communities that have been impacted by COVID-19. From producing ventilators to donating masks to continuing to work in essential roles, I've seen an impressive rally for support.

In the commercial trucking industry, I've also been so impressed with all the professional truck drivers who have continued to move goods across the country.

From hauling groceries to medical supplies, drivers continue to deliver essential goods to our communities, and Goodyear has been right there with them to supply the needed tires and retreads to keep their trucks on the road.

What kind of trends are you seeing in the marketplace? How is your company reacting?

Budzinski: On the commercial side, we are starting to see an increase in retreads among fleets looking to maximize the use of their casings and postpone the more expensive purchase of new tires. Where possible, fleets are gravitating toward products to help maximize value and keep them on the roads.

To meet these needs, we are leveraging our UniCircle (spliceless) retread products through our Commercial Tire & Service Network to help fleets extend the life of their tires.

In consumer, we are seeing shoppers seek out ways to feel safe while getting the products and services they need. Consumers are finding options like online tire shopping and our "zero contact" service particularly appealing.

As states begin to re-open their economies, we may also see a shift in how consumers travel—relying on their own vehicles rather than public transportation and driving to summer vacation destinations instead of flying.

With sports being idled across the world, particularly NASCAR, how has that impacted Goodyear's marketing efforts? Is there a way to still reach those consumers?

Dwyer: While sports were suspended, we used the time to rethink our consumer marketing efforts to adapt to the "new normal." We've been working closely with our sports affiliates as they develop plans to safely resume live events.

We also are seeking ways for Goodyear to bring fans closer to the action, while they may not be able to physically attend events in the short-term.

For example, we were proud to be an integral part of the return to NASCAR racing in May. We celebrated with a new TV advertisement featuring a voice-over by racing legend Dale Earnhardt Jr. and a fan sweepstakes for a chance to win a Goodyear Eagle racing tire that was driven on by the winner of the Darlington 400.

We also recently announced that the Goodyear Blimp will return to Europe to provide aerial coverage for sporting events for fans in those markets.

In these uncertain times, our hope is to continue to find innovative new ways to connect fans with the sports they love.

Do you expect to roll out any additional products in 2020? What will they be and what sector will they serve?

Dwyer: This fall, our new Goodyear WinterCommand Ultra will be available to consumers looking for a premium winter tire with exceptional snow and ice traction. We unveiled this tire at the 2020 Goodyear North America Customer Conference earlier this year in Denver.

How has the UHP market fared in light of the proliferation of LTs, SUVs and CUVs? Are you seeing growth and potential for future growth? Any new innovations in the segment?

Dwyer: Despite the proliferation of light trucks, SUVs and CUVs, we still see a significant growth opportunity for UHP tires. There are many examples of premium CUV and SUV trim levels that are now fitted with high- and ultra-high-performance tires, including vehicles from Audi, BMW, Mercedes, Land Rover, Porsche, Volkswagen and many others.

With new materials, compounds and construction technologies that have been recently developed, UHP tire performance has evolved, allowing customization of products for specific market-back needs.

Historically, the UHP segment was reserved for maximum performance summer tires; however, today, our UHP offering expands to all-season tires, as well.

As an example, our Goodyear Eagle Exhilarate tire features an all-season tread compound and ActiveGrip technology for exceptional traction in wet and dry conditions. It also features ActiveStrength Technology for confident handling and a strong, lightweight construction and ActiveBraking Technology to promote shorter braking distances on both wet and dry surfaces.

Anything else you would like to add?

Dwyer: We recognize that consumers are prioritizing value in many of their purchases during this pandemic; however, Goodyear firmly believes that premium tires still offer a distinct advantage when it comes to attributes like enhanced comfort, performance, longevity and all-weather traction, among others.

At Goodyear, we are continuing to evaluate our product mix and ensure we have the right tires for a variety of consumer preferences during and after the pandemic.