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Goodyear Europe: many growth areas

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Following the Goodyear Tire & Rubber Co.’s announcement that its Q4 2011 net income was $18 million on sales of $5.7 billion, the company conducted an investor conference call.

Rich Kramer, Goodyear’s chairman, CEO and president, said that in 2012, the company’s strategy is designed to take advantage of the seven megatrends outlined at the recent Goodyear dealer conference in Orlando, Fla. Number one on that list is “growth in emerging markets,” and one market that has much growth potential for the company is Europe.

Modern Tire Dealer columnist Saul Ludwig asked Kramer about he challenges Goodyear has faced in Europe. The company announced that for 2012 in Europe, the consumer replacement industry is expected to be down 2%, consumer original equipment down between 5%-9%, commercial replacement down between 3%-8% and commercial original equipment down between 20%-25%.

Kramer said earlier that the company’s outlook for volume in Europe is cautious, particularly on truck tires, in addition to an uncertain winter tire European market following a strong 2011.

“These are all big headwinds in Europe that you’re looking at,” says Ludwig. “Are there any positives or is 2012 going to be a tough year for Europe compared to a great year you had in 2011?”

Kramer says that Goodyear’s European product portfolio and the mix of business there is still very good.

“In terms of what we were able to accomplish in 2011 and how we’ve driven our mixed strategy in Europe over the past five years is really what you saw 2011 being the beneficiary of,” says Kramer. “When you look at what particularly the German OEMs are continuing to do, you look at the product lineups that we have, I would tell you that the core business in Europe is still very strong.”

Kramer acknowledges that while there are economic challenges in Europe in general, there are still growth businesses in eastern Europe that continue to drive profitability there.

“Clearly there are headwinds, but we have a strong foundation in Europe,” says Kramer. “There are still a lot of growth areas and a lot of opportunities.”  

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