Goodyear Dealer Conference, Day Two: the turnaround strategy according to Keegan
Bob Keegan, chairman, CEO and president of Goodyear Tire & Rubber Co., told 2004 Dealer Conference attendees why they should believe in the company's turnaround strategy.
His seven-part strategy guiding the turnaround includes the following:
1. Leadership. Keegan said leadership applies to more than Goodyear's executives and associates. "If we decide to (participate) in a business, we intend to win in that business."
2. "Cash is king." The goal is to increase revenues per tire to drive up margins.
He said restructuring the company's bank debt has helped improve working capital. Low-cost manufacturing and improved quality also will help the company financially.
3. Lower cost structure. Goodyear made a number of cost-cutting moves in 2003. They included the union contract with the United Steelworkers of America (which Keegan referred to as "fair") and other "painful but critical" moves such as reducing the workforce by 4,200 people.
The ongoing Six Sigma program, instituted by North American Tire President Jon Rich, will continue to force the company to look at the way it does business in all seven of its business units.
4. Leverage distribution. "We're here to build your business, not simply move tires."
5. Build brand strength.
6. Product leadership. Assurance, Goodyear's new broad-line tire family, is one example of how Goodyear plans to make a significant impact in the marketplace, he said. "New product screens will be the engine of growth for our company."
7. Advantaged supply chain. Goodyear will not only take advantage of its global manufacturing, but also simplify its product lines.