Keegan says 'cash is king' approach will improve Goodyear's outlook
During an investor conference call following the release of second quarter financial results, Goodyear Tire & Rubber Co. Chairman, CEO and President Robert Keegan said the company remains focused on its "cash is king" approach to improving its balance sheet.
The company remains committed to doing what it has to do to remain competitive and control costs, he said.
He reported the company is having good, constructive talks with the United Steelworkers union concerning a labor contract. The current contract expired in July, and the union is operating on a day-to-day basis. He says the company remains confident that it will be able to drive a deal with the union that lets Goodyear remain cost competitive in the market. Key points remain the company's overall footprint, productivity issues and legacy costs.
As for the suit filed General Motors Corp., which claims the tiremaker is improperly withholding some shipments in a dispute over tire prices, Keegan would not elaborate, sticking with the company's prepared statement (see related Web item, "Goodyear sued by General Motors"). He did say, however, that the company has not yet been served with the lawsuit.
For the outlook for the rest of the year, Keegan said the company is watching key market indicators and keeping a close watch over its dealers. It also is examining its marketing approach and is cutting back on things that don't create value.
Market improvements are expected due to pent-up demand for tires and strong winter tire sales in Europe due to recent German legislation which will create increased demand for winter tires.