Goodyear-Sumitomo alliance: Is the end near?
It looks like the alliance between Goodyear Tire & Rubber Co. and Sumitomo Rubber Industries Ltd. is in danger of dissolving.
During Goodyear's Feb. 13, 2014, investor conference call, held following the release of its 2013 financial results, Laura Thompson, executive vice president and chief financial officer, had this to say about media reports on the topic.
"Many of you who have followed us for a long time have seen our exposure related to our relationship with Sumitomo. We have a global alliance with Sumitomo Rubber Industries, or SRI, and we’ve had that since 1999. Among other agreements, many other agreements, we own 75% and SOI owns 25% of two companies, Goodyear Dunlop Tire Europe and Goodyear Dunlop Tire North America.
"We have learned that SOI has engaged in anticompetitive conduct in violation of applicable antitrust law. We concluded that warrants the dissolution of this global alliance, and on Jan. 10 of this year, we began arbitration proceedings seeking the dissolution of that global alliance."
As part of the proceedings, Goodyear also is seeking damages.
"We don’t believe the dissolution will have any material adverse impact on our customers, our operations or our liquidity, but as you know, arbitration proceedings are to be kept confidential," she said. "So you’ll see what I said and a little more in our 10K that comes out, but we really can’t comment on anything more than that."
On Sumitomo's website, the company would only say that it was aware of the arbitration petition to dissove the joint venture and alliance agreement. The petition was filed with the International Chamber of Commerce on Jan. 10, 2014.
Under the alliance, Goodyear controls the Dunlop brand in the United States, Canada and Europe.