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Gibara predicts slowdown will continue until fourth quarter

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How long will the economic downturn in general, and the sluggishness in the tire industry in particular, continue? No one knows, says Sam Gibara, chairman and CEO of the Goodyear Tire & Rubber Co.

"Nobody has a clear visability as to how long it's going to last," said Gibara following his keynote speech at the Akron Rubber Group's spring technical meeting. Gibara nonetheless offered some predictions.

He said Goodyear estimates the economy will remain slow during the second and third quarters. But it will pick up in the fourth quarter.

His keynote speech addressed both product and cultural evolution in the tire industry. Tires are the most highly engineered parts of a vehicle, he said. For example, 25 years ago, maximum mileage on a consumer tire was 10,000 miles. Today it is 10 times that.

However, "until a year ago, tires were really considered a commodity." That has changed in the last year, he said. There has been "a renewed attention to tires as a higher engineered product" (he did not mention the Firestone recall in his speech).

Gibara blamed the industry for not promoting tires as more than a commodity. Now safety, reliability and durability are being touted, and appreciated by consumers and original equipment (OE) manufacturers alike.

But he cautioned that "tires are not indestructable.... (they are) vulnerable to a host of real-world conditions," such as:

* under-inflation,

* over-loading,

* road hazards, and

* severe impacts.

Gibara said 1.1 billion tires were manufactured worldwide in 2000, and there are at least "eight times that traveling the highways."

The National Highway Traffic Safety Administration (NHTSA) reported that 822 million miles were driven in 1999, yet only 645 accidents reported to NHTSA were categorized as being tire-related, according to Gibara. And the majority of those were due to under-inflation and overloading.

Cultural evolution in the tire industry has occurred at a much slower pace than product evolution, he continued. But in the last few years, there have been signs of that changing.

He used his own company as an example. Goodyear has formed a number of partnerships to advance technology -- including its agreement to share run-flat technology with Groupe Michelin -- and increase its manufacturing and OE presence in other markets, like Japan.

Goodyear also has partnerships with Sumitomo Rubber Industries, Sandia National Laboratories, Cycloid Systems and Phase IV Engineering.

"We are an old industry and not one of fast growth. Joint ventures with partners from within and outside our industry can promote cross-fertilization across multi-cultural lines, allowing technological advancement to occur much faster."

Goodyear plans to continue its commitment to both run-flat technology and the development of integrated components for vehicles, he added.

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