Despite a large drop in net income versus last year's results, the second quarter wasn't a total loss for Goodyear Tire & Rubber Co.
"The positive impact of production cutbacks have been felt on our balance sheets and on our working capital," Goodyear Chairman and CEO Sam Gibara said in a press conference this morning.
"As a percentage of sales, working capital is down to 16.2% from 19.4% a year ago in June. It's still high and needs to come down and we will continue to make this a priority."
Goodyear took six million tires out of production, mostly in North America, during the second quarter and will pull millions during the third quarter.
The Akron, Ohio-based tiremaker's G3 brand positioning is yielding results, too, according to Gibara. It "has allowed us to improve our mix that has resulted in selling more of our premium brand, and that is Goodyear."
Shipments of Goodyear's Dunlop and Kelly brands were up during the second quarter as well. "That's exactly what we intended to do," Gibara says.
The company's private brands did not fare so well as buyers "look to brands they know and trust."
Gibara says Goodyear's consumer and commercial original equipment tire shipments were down during the second quarter.
However, the manufacturer reduced its debt by $300 million between March and the end of June.
"We fully expect to deliver substantially improved earning performances" throughout the rest of the year.
