Goodyear reports net loss for 2001
Goodyear Tire & Rubber Co. reported a net loss of $203.6 million on net sales of $14.1 billion for 2001.
That compares to $40.3 million in net income in 2000 on sales of $14.4 billion. Tire units decreased by 1.8%, from 223.3 million units to 219.3 million.
Currency exchange rates had a significant effect on results, according to Goodyear. The company estimates currency movements reduced net sales by some $395 million and operating income by approximately $85 million in 2001.
"Our sales performance, while below 2000's, outperformed the industry," said Sam Gibara, Goodyear's chairman and CEO. "Industry shipments in North America were down 6% for the year, and the U.S. consumer replacement market was down 8.5% in the fourth quarter, the biggest decline since 1980."
In the fourth quarter, Goodyear posted a net loss of $174 million, compared to a loss of $102 million the year before. Sales and units sold also were down in the quarter; sales dropped 1.5% to $3.47 billion, while unit volume declined by 2.2% to 54.5 million units.
"Depressed economic conditions, continued weak demand around the world and the cost of reducing production to align inventory levels accordingly had a significant impact on our results," said Gibara.
"Reducing our inventory levels through production cutbacks relative to 2000 levels resulted in approximately $320 million of unabsorbed costs during the year; $150 million of this impacted us in the fourth quarter."
Goodyear's North American business unit recorded $7.152 billion in sales -- up half a percent from 2000. Tire sales in North America totaled 112 million units, down some 3% from the previous year.