Goodyear innovations impacted results, says Keegan
During an investor conference call following release of Goodyear Tire & Rubber Co.'s third quarter 2005 financial results, Robert Keegan, the company's chairman and CEO, countered criticism that the company was not spending as much on research and development as its competitors with "it's not how much money you spend, it's how you spend your money."
Keegan noted its innovative products, such as TripleTred Technology, have been earning high ratings in consumer surveys and testing. "TripleTred technology is a home run for us," he said, adding, "money alone does not buy results."
Rich Kramer, executive vice president and chief financial officer, said the company will continue to evaluate the need for future price increases. Goodyear has raised tire prices three times this year in North America, two times in Europe.
Keegan feels raw material costs will increase another 8% to 10% next year. The company will continue to invest wisely in R&D and remain intensely focused on reducing costs while building on its momentum of producing innovative new products. "We are now clearly the industry leader in developing and marketing new products," he said. "We are well positioned to meet challenges and marketing opportunities."
He said in the original equipment market, "We're selective with OEs. We've moved to higher potential margin products and diversified our customer base significantly."
Keegan also praised the efforts of the company's employees in the face of the recent hurrricanes, especially some 60 employees at the company's Beaumont, Texas, plant. These people "showed tremendous dedication and heart," while not even knowing how their own homes fared, Keegan said.
Hurricane Katrina was the worst concerning human tragedy, but Hurricane Rita was a bigger blow to the tire industry and the economy and will impact raw material costs due to facility damage and interruptions to the overall infrastructure, he noted.