Keegan: Improved dealer relationships have led to 'dramatic' turnaround

Sept. 23, 2005

Bob Keegan, chairman, CEO and president of Goodyear Tire & Rubber Co., said the foundation of its "dramatic" turnaround is improved relationships with its dealers.

Speaking at Goodyear's first investor meeting in two-and-one-half years, Keegan said creating economic value in the future will greatly depend on these relationships. He credited North American Tire President Jon Rich and his staff for the improvement.

One dealer, taped at the recent Fortera Tripletred introduction in Phoenix, Ariz., was pleased with Goodyear's progress. He said the company was "respective of dealers -- finally." Comments from other dealers praised the executive leadership.

New products like the Fortera Tripletred have had a "halo effect" on the entire company, said Keegan. "And you can expect future product streams of dramatic impact in the future."

By introducing new products and following market-driven strategies, the company has improved its revenue per tire by 18% over the last two-and-one-half years. The goal was 4%, said Keegan.

One goal that the company has not met is reducing its debt. Keegan said Goodyear is working on reducing its cost structure and evaluating the closing of high-cost factories.

Over the next three years, Goodyear anticipates incurring cash restructuring charges of approximately $150 million to $250 million to reduce its high-cost manufacturing capacity by between 8% and 12%, resulting in anticipated annual savings of between $100 million and $150 million.

For more information, see "Goodyear's plans include closing high-cost factories" in our Recent/Breaking News section.