Kramer: Goodyear-Cooper integration benefits apparent

AKRON—Since closing on the $2.5 billion acquisition of Cooper Tire & Rubber Co. in June 2021, Goodyear has been working to ensure a smooth transition, while optimizing the efficiency and streamlining the operations of the combined company.

It is a tall task, considering the deal brought together two of the world's 15 largest tire companies. Combined, Goodyear (No. 3 globally) and Cooper (No. 13 globally) had sales of around $16.5 billion when the deal was finalized.

During the second quarter of 2022, the company said it was in the final stages of the integration and that, despite some of the challenges expected with a merger like this one, operations were coming together fairly seamlessly.

The results of those efforts have been showing up in the combined companies' bottom line for some time. And the fourth quarter of 2022 was no exception.

During an investors' call Feb. 8, the company noted that the synergies of the Cooper Tire combination during the fourth quarter of 2022 totaled $40 million, compared with third quarter 2022 benefits of $25 million.

And that number will continue to grow.

"We continue to expect synergies to reach an annual run rate of $250 million by mid-2023," said Richard Kramer, Goodyear chairman, president and CEO.

To ensure that the combined company maximizes its core strengths, Goodyear is working to ensure that its full range of tire products—including those that carry that Cooper Tire and related monikers—are readily available for consumers.

All of Goodyear's retail stores, Kramer said, now have Cooper products.

"One plus one equals three in this case," he said. "There have been distribution elements with how they go to market and how they sell to distributors. They do those things really well. We are not going to touch those.

"We are keeping where they are strong and integrating at the same time in other places."

The integration also includes the addition of Cooper Tire products to the Tire Hub distribution portfolio, which is a key component especially as Tire Hub continues to grow.

Overall, Kramer said, the Cooper and Goodyear portfolios are becoming more intertwined.

And all of these things are smaller pieces that help to create a stronger company, one that Kramer believes will be able to capitalize on technological trends that will help to define Goodyear's role in future mobility.

"We are a team," he said. "We are not reliant on one person. We are keenly focused in getting our structure in line relative to competitors, yes, but with the marketplace as well. We need to make sure our operations get more efficient every day.

"Like with Cooper, we will get creative with how we can use capacity moving ahead. Our product innovation engine has worked."

The company's presence at the Computer and Electronics Show in Las Vegas last month is proof of how well the innovation is going. There, Goodyear showcased a 90-percent sustainable materials tire, which Kramer called "a significant step" toward the company's goal of creating the industry's first 100-percent sustainable-material tire.

"This tire is another example of the ingenuity and grit our company has demonstrated over its 125-year history," Kramer said.

Other innovations Goodyear showcased at CES included its nonpneumatic tire technology—NexTrek—and its SightLine connected tire technology.

"They are not revenue-generating today—but changes in mobility, going from a 'dumb' tire to an intelligent tire that has a place on an intelligent vehicle, there is both an integrated and service element," Kramer said. "I am excited for the role that Goodyear will play in this."

Goodyear employs about 72,000 people and manufactures its products in 57 facilities in 23 countries.