Goodyear Dealer Conference, Tuesday report: Dealers are critically important, says Keegan

Feb. 11, 2003

Bob Keegan, CEO and president of Goodyear Tire & Rubber Co., laid it on the line for the independent dealers attending its dealer conference in Orlando, Fla.: "You play a critical role with us."

Addressing attendees at today's general session, Keegan said Six Sigma and accountability are important parts of Goodyear's turnaround plan, outlined yesterday by Jon Rich, president of Goodyear's North American Tire business unit.

He said North American Tire makes up about half of the company's revenues, which explains why the company performed "below expectations" in 2002 despite good results from the other six global business units. He blamed the softness of the market combined "with mis-steps in... strategies and execution" made by Goodyear.

He headed off any worries about the financial position of the company early by saying with cash it has on hand, anticipated cash flow, credit sources and its dealer network, "we fully expect to meet our financial obligations."

He said building the businesses of its dealers is the most important part of the turnaround plan. "It's not fundamentally about Wall Street, although we love our investors. It's not fundamentally about the consumer. Frankly, it's about you. If you win, we win."

Goodyear's job, according to Keegan, "is to listen and to act. You might not always agree with what we decide, but we will act," he told the dealers.

"You are the face of Goodyear to the consumer and the end-user. But you are also the face of the consumer and end-user to Goodyear, and we need to take advantage of that. We do not focus enough on the second one."

Keegan, a car buff, related a number of important things he has learned since joining the company in 2000:

* The importance of the family nature of the business.

* Tires are "engineering marvels."

* Most people outside the industry don't know what goes into the designing and manufacturing of tires.

* Tires are underappreciated by the end-user. Trying to change this mind-set "might be the biggest challenge for you and us."

* Consumers are highly dependent on tire dealers when they are buying tires.

* Goodyear and its tire dealers "are critically important to each other."

Keegan said it will not be enough to get the company moving forward in a positive direction.

"This is not about taking the next step. We have to take the next step. This is about Goodyear winning big."

Jim Tellier, president of Trader Ray Tire Center in Detroit, Mich., thought highly of Keegan's speech.

"That's the first time I've heard Goodyear say the dealers are important," he said.