Goodyear Dealer Conference, Day Three: 'So far, so good' isn't good enough, says Keegan

Feb. 5, 2007

At his company's annual dealer conference, Bob Keegan, chairman, CEO and president of Goodyear Tire & Rubber Co., used two words to describe 2006: "turbulent" and "dramatic."

Working without a script, he spoke to the tire dealers in attendance on a personal level. Getting through 2006, which included a three-month strike by the United Steelworkers of America (USW), "demanded the ultimate in flexibility from you and us, and we got it."

He said he felt the company was in good shape entering 2007. Although the re-building process, started in 2003, continues, Goodyear is comparatively more profitable and "in better position to take advantage of opportunities presented to us than we were four years ago." Here's why:

1. Products. Goodyear dramatically changed the way it brings products to market. That has resulted in a steady stream of new products annually.

(Joe Gingo, executive vice president and chief technical officer, said it takes from one to three years to introduce a new product from idea to availability. In the future, he predicted the turnaround time could be shortened to six to 12 months. "Our systems are becoming totally integrated, from design all the way to production," he said. Getting products to market sooner "is a distinct competitive advantage.")

2. Teamwork. Keegan gave credit to a reorganization of the company's hierarchy and the creation of "outstanding" business teams for leading the way.

3. Favorable union contract. "We have a competitive cost structure today," he said. Keegan praised the dealers for managing the situation effectively, and went so far as to credit their support during the strike for helping Goodyear get the best possible deal. "Never before did we need to be aligned more fully with you."

(Keegan cited a consumer poll conducted by Goodyear in mid-December that indicated only 10% of the 1,000 tire buyers polled acknowledged there was a strike. And one-third of them believed it was another tire manufacturer involved, not Goodyear! Based on the results, Keegan said Goodyear came out of the strike "unaffected.")

Keegan said Goodyear's ultimate goal is to be the leader in the tire industry, a goal "more achievable now." Until -- and maybe even if -- that happens, the company is not satisfied. "So far, so good" isn't good enough. "We remain confidently paranoid."