Stewart, in his second call with analysts since being named to succeed the retired Richard Kramer as Goodyear CEO and president, said he has spent the last three-plus months delving into the plan, visiting plants across the U.S., and speaking with leadership teams in manufacturing, engineering and purchasing to ensure he and his team are "laser-focused" on executing the plan.
"We are focused on a very clear set of KPIs (key performance indicators) to deliver the Goodyear Forward operating plan," Stewart said. "And we have the governance and accountability very clear through our chain. Through my first month here at Goodyear, it is clear our associates are committed to doing the right things, and in the right way."
Goodyear reported that the plan already has resulted in savings of $72 million, and it forecasts that the plan will result in at least $375 million in additional savings by year-end, an increase of $25 million from what the company reported in its 2023 report.
"...We have good reason to believe that we should be able to exceed that ($375 million) level," Zamarro said, "although we need to continue to execute on our work streams real time to be able to increase that amount publicly."
Stewart said cost savings are "flowing through quite nicely" through logistics and the supply chain, "as well as the actions that we've taken around complexity reduction commonality of platforms and to enhance our margins via through repricing, via through choosing not to run those other products that really don't fit into our portfolio."
Stewart didn't specifically name the products that didn't fit into the firm's portfolio.
He did, however, say the company is focused on growing the Cooper brand, and he noted that Goodyear would release several premium products globally over the next few months, including an Assurance WeatherReady 2, an asymmetric Eagle product and more products for the electric vehicle segment.
"We're seeing some really positive success in the luxury premium performance markets in Asia Pacific and the continued strength of our wins on the EVs segments," Stewart said. "So all very positive news."
Zamarro said the company saw "a whole lot of choppiness" over the last few years, with imports accounting for about one-fourth of the market, which she said, accounted for around 1.5 million more units than normal.
Still, she said Goodyear sees no evidence of consumers' trading down, especially in a branded Tier 1 tire segment. It has resulted in a consistent market share over the last five years, she said.
"Over the last couple of quarters, we have seen some weakness in Tier 2 and Tier 3 accreting to Tier 4 and share," Zamarro said, adding it's not clear whether that weakness is driven by consumer preference or "something linked to distributor behavior, because historically what we have seen is distributors going long on low-end tires in an inflationary environment. So this is one that we will continue to watch."
Stewart said Goodyear is on track to drive more than $1 billion in annual run-rate benefit by year-end 2025, a key part of the Goodyear Forward plan. He said Goodyear's retail network had its best quarter in five years, "driven by advancements in consumer insight, and the actions we've taken to improve our price and our mix."
Goodyear is implementing improvements at its plants to increase operating equipment uptime, reliability, reducing the number of configurations and "preparing to run several products on common product platforms, as well as rationalizing our materials," Stewart said, in addition to reducing overtime and third-party contractors.
"As I reflect on the quarter, I am very encouraged with our execution," Stewart said. "
"We'll keep a close eye on the industry volume and price mix over the next quarters to ensure we're managing the external environment while we execute our plan to drive value for our shareholders."
