AKRON—Robert E. Mercer spent more than four decades working for Goodyear, but he always will be associated with a two-month period of 1986 when he, as chairman and CEO, helped fight off a corporate raider who had set his sights on Goodyear.
In the end, Goodyear fended off the hostile takeover attempt by financier Sir James Goldsmith, but it came with a price. Goodyear had to sell off a number of assets to buy back Goldsmith's shares and became crippled under a mountain of debt.
"Sure, Goodyear came out reasonably intact," Mercer said in an interview some years after the raid. "But I don't think anyone was a winner. The guy we defeated walked out with $94 million."
Mercer, whose career at Goodyear spanned 42 years, died Aug. 28 at his home in Akron of natural causes. He was 96.
Mercer joined Goodyear in 1947 as a sales trainee after graduating from Yale University and serving in the U.S. Navy. His first position was selling conveyor belt and industrial hose in the firm's Duluth, Minn., territory that included Michigan's Upper Peninsula.
After rising through the ranks in a series of sales positions in the company's Industrial Products Division, he was named the unit's general manager in 1968. He was assigned to Goodyear's Tire Division in 1972 as assistant to the president before being named president of the firm's Kelly-Springfield Tire. Co. subsidiary in 1974.
Mercer became Goodyear's vice president for tire marketing in 1976, and was then named company president in 1978, chief operating officer in 1980, and chairman and CEO in 1983.
He succeeded Charles J. Pilliod Jr. as chief executive, becoming just the fifth person to hold that title at Goodyear. Mercer retired from Goodyear in 1989 under the company's mandatory retirement program, according to an obituary issued by his family.
Still, his legacy remains tied to the battle with Anglo-French financier Goldsmith, who came after Goodyear during a time when corporate takeovers were commonplace.
The years leading up to the takeover attempt saw Mercer take over the Akron-based tire manufacturer at a time of a slumping auto market, and foreign competition taking more of an interest in the U.S. market. While continuing to focus on quality and innovation in Goodyear's tire business, he also was looking to diversify the firm.
In 1983, he completed the acquisition of oil and gas firm Celeron, which joined other non-tire subsidiaries Motor Wheel, Goodyear Aerospace and its Chemical Products Division. Mercer also approved Celeron's plans to build a 1,750-mile All American Pipeline to link offshore oil wells on the West Coast with refineries in Texas.
It was three years after the Celeron acquisition that Goldsmith launched his takeover bid, claiming that Goodyear was guilty of over-diversification.
When it became clear in October 1986 that Goldsmith was behind the takeover bid, Mercer and Goodyear battled back, with the support of the Akron community, Goodyear company towns across the U.S., employees, retirees, union members, and local, state and federal politicians. There were hearings before a U.S. House subcommittee, where Mercer denounced what he called permissive securities that were allowing the "plunder" of American corporations, the family obituary said.
In November 1986, Goldsmith abandoned the takeover attempt and agreed to sell his shares back to Goodyear, but at a profit of $94 million. Goodyear also bought back an additional 40 million shares at a cost of $2.6 billion, saddling the company with long-term debt. Goodyear was forced to sell its Goodyear Aerospace, Motor Wheel and Celeron units, close two tire plants and cut 7,000 jobs to help finance the cost of fighting the takeover bid.
In a 1998 interview, Mercer said he didn't agree with all the attention paid to stock prices. He added it was a misnomer that those putting money into Wall Street are "investing in America." He told one broker that he runs the "biggest off-track betting facility in the country," noting that only those who put money into initial public offerings and later offerings are real "investors in America."
Mercer also said it was likely Goldsmith would have sold the tire unit to a foreign competitor, so he took some solace in the fact the company came out as intact as it did.
"In retrospect, that's what the fight was about," Mercer said. "Either he'd sell 40 percent and merge the rest with a foreign company, or we'd sell 19 percent and keep the company."
Richard Kramer, current Goodyear chairman, CEO and president, said in a statement it's not an exaggeration to say that the "Goodyear of today" wouldn't exist without Mercer.
"As our CEO during the attempted takeover of the company in 1986, Bob stood firm in his commitment to our associates, to the company, to our customers and to the city of Akron," Kramer said. "He not only saved the company from an uncertain fate but used the experience to reposition us for growth in the future. Bob added to the legacy of a great American company and planted the seeds for the Goodyear of the future."
Mercer also served on the board of directors of several corporations, including General Electric, CPC International, Manufacturers Hanover Trust and Roadway Express Inc., where he was chairman of the board, a position he retired from in 1998.
He also served as head of the U.S. Better Business Bureau and led the U.S. Savings Bond Volunteer Committee's national fundraising campaign. Following his retirement, he was a visiting lecturer on corporate ethics at the Wharton School at the University of Pennsylvania. And the University of Akron established a four-year Goodyear Global Scholarship in his name for the North American region in the College of Business Administration.
Mercer is survived by his wife of 72 years, Mary; daughters Kathleen Bond of Shaker Heights, Ohio, and Maryann John of Richmond, Va; sons Robert G. of Santa Monica, Calif., Donald of Wichita, Kan., and John of Akron; 10 grandchildren; and four great-grandchildren.