'Record profits by 2013!' says Goodyear
Goodyear Tire & Rubber Co. discussed its strategies to capitalize on industry and economic trends "to achieve record levels of profitability" in 2013 at an investor conference in New York, N.Y., today.
Goodyear said it is targeting record segment operating income of $1.6 billion in 2013, with its North American Tire business unit representing $450 million of that.
“Having momentum coming out of the deep economic recession, we are now positioned to confidently drive higher levels of performance across our businesses,” said Chairman and CEO Richard Kramer.
“We have a clear view of our destination as a business and well-defined strategies for driving value going forward," he said. "Our focus will be winning in the segments where the highest profits are available for Goodyear and for our customers.”
Going forward, the company anticipates making capital investments of between $1.1 billion and $1.3 billion per year in 2012 and 2013, respectively, up slightly from an expected $1.1 billion to $1.2 billion in 2011.
Between $500 million and $600 million each year will be focused on profitable growth opportunities through the following:
1. plant modernizations,
2. expansions and
3. new construction.
These investments will support a 3% to 5% annual increase in unit volume, focused on high-value-added tires in high-margin segments.
Goodyear expects to reduce its underfunded pension obligations to $1.2 billion -- or by more than half -- by 2013. It expects to make pension contributions of $550 million in 2012 and $525 million in 2013 in addition to contributions of approximately $275 million in 2011.
As a result of these planned actions, the company’s pension expense is expected to decrease by $100 million a year by 2013.