Our View: Goodyear Forward transformation gets passing marks thus far

It's not uncommon for companies looking to improve their financial fortunes to come up with a fancy name to soften the blow of what—for want of a better term—is nothing more than a slash-and-burn strategy.

When Akron-based Goodyear in November 2023 unveiled its "Goodyear Forward" plan, there undoubtedly were those who expected this to be another such program, one that looks better on paper than when it's implemented in the real world.

But 14 months into the initiative, midterm grades look promising.

Prompted by a letter to Goodyear from Elliott Investment Management L.P., a large shareholder that said it was disappointed with Goodyear's poor stock performance, the world's No. 3 tire maker hasn't been making cuts just to make cuts. Since bringing on Mark Stewart as CEO and president to replace Richard Kramer as its top exec, Goodyear has been methodical.

From the start, Goodyear rejected the Elliott Investment proposal that the firm sell off its retail store operations. The chain of stores helped bolster the sale of premium Goodyear tires and its profitable position in the U.S. consumer replacement business, and the stores remain an integral part of its business.

Thus far, two of the most visible actions have been the pending sale of its off-road tire business to Yokohama and, most recently, plans to sell its rights to the Dunlop name in North America and Europe to Sumitomo.

Stewart said there still is value in the Dunlop name, and Brand Finance, a London-based independent brand valuation and strategy consultancy, still rates the Dunlop brand as the fifth-most valuable brand in the tire industry.

The Dunlop name certainly has a venerable history. It dates back to 1888, when Scottish veterinarian and inventor John Boyd Dunlop was credited with developing the first workable pneumatic tire. But since Goodyear and Sumitomo dissolved their alliance, ownership of the Dunlop brand has been splintered over various products and in numerous geographic regions.

Now let's be honest, Goodyear hasn't been the best steward of the Dunlop brand during the quarter-century it has controlled rights in North America and Europe. Last year, Goodyear repositioned the Dunlop brand as its "pan-European" value brand, positioned between the premium Goodyear and five "local hero" brands.

In North America, the brand has shrunk to less than a 1-percent market share. So Goodyear is making the smart move, getting good value for the asset and leaving Sumitomo to work on returning the brand to premium status.

Goodyear also accomplished much behind the scenes. As of late 2024, officials said the Goodyear Forward plan has provided $1.5 billion in gross annual run-rate benefits.

There have been sacrifices along the way. Right before Goodyear Forward was launched, the firm said it was cutting 1,200 jobs in the EMEA region. Goodyear also said last July it was moving 175 jobs from its Akron headquarters to Costa Rica. And now, the tire maker is looking at repurposing its Danville, Va., tire plant to focus on mixing and aircraft tires, a transition that will bring job losses as well. And Goodyear still has to sell its synthetic rubber/chemicals business, which could bring negative implications for the unit's work force in the U.S. and Europe.

But all in all, Goodyear has shown sure footing in this transformation. And as the firm sends its squad of blimps out to celebrate the centennial of the flying mascots, there will be much good news to spread.