In an interview earlier this week with Goodyear Tire & Rubber Co. leadership, Scott Rogers, president of consumer for Goodyear, provided detail on how the TireHub deal fits into the existing overall strategy for the tiremaker.
“First, this announcement [of TireHub] continues our aligned distribution strategy,” said Rogers. “So we talk about our aligned distribution strategy each year at our dealer conference and it’s really all about having an aligned national distributor and aligned regional distributors. That’s not changing for us. TireHub will now [be the] aligned national distributor and continue to be complemented by our network of aligned regional distributors as they do today. So we will continue to work with those aligned regional distributors to drive growth together. So both are central to our strategy, and our strategy is really not changing at all.”
The emphasis on that aligned business model began at the 2017 dealer meeting. At that event, Ryan Patterson, the then head of Goodyear’s North America consumer tire division, addressed the significant shifts in the tiremaker’s distribution network with a mention of more to come. In January 2017, he shared that company had reduced its former network of approximately 50 authorized Goodyear distributors to just 18 in a few short years.
“Our intent is to eliminate excessive and disruptive distribution which undermines the value of what you do for consumers and your alignment with Goodyear,” Patterson said.
While the strategy may not be changing, its current implementation in the marketplace is making waves. Earlier this week, ATD and Dealer Tire (both strong national distributors of the Goodyear product line) were placed under review for downgrade by Moody’s Investors Service following the announcement of changes to Bridgestone and Goodyear’s JV to combine the two Tier One companies’ national distribution. Both ATD and Dealer Tire have yet to comment.
As Rogers mentioned, earlier this year at the 2018 annual dealer conference in Nashville in January, Goodyear leadership touted the value of a connected business model to shops aligned within the Goodyear network of dealers, but there was no specific mention as to plans to consolidate national distribution into a single entity.
In his remarks from the stage in January 2018, Rogers did focus of the need for change and innovation within the organization to remain competitive.
“Our industry is definitely changing fast, with or without us. We have to embrace change as a positive sign of the innovation that is happening, and the innovation the consumer expects. We can’t hope things will stay the way they were, so Goodyear will keep evolving to stay ahead and be competitive in the marketplace,” Rogers said. “So, to win for the next 120 years, Goodyear will continue looking forward. We’ll continue to innovate with new products, services and business models. It’s clear [that] if we don’t, someone else will.”
Interesting that those same speeches were being polished and prepared for the annual meeting presentations as Mattel exec Peter Gibbons was starting a new phase of his career as the newly hired CEO of TireHub, the national distribution joint venture between Bridgestone Americas and Goodyear.
The theme of the Goodyear Customer Conference 2018 was “Winning Together” highlighting the company’s overarching goals of evolving its operational model to get closer to the consumer. In his remarks at the close of the sessions, CEO Rich Kramer spoke to dealers from the stage, asking “one simple, straightforward question” regarding partners moving forward, who would they rather partner with in the future.
“In this new world, a world presenting more choices and options in it, my question for you is, who would you rather be with? We recognize there’s an abundance of choices out there in the tire industry,” said Kramer. “Our business is not just about selling tires. Our business is about anticipating the products, service and expertise that consumers need to solve their problems and their transportation needs. Our business is about being a value-aligned partner committed to supporting you and servicing your customers and doing so with solutions that grow, evolve and keep up with the changing needs, habits and preferences of those consumers. I want to tell you, having the right partner makes a difference now, but it’s going to make an even bigger difference in the future.”
In his remarks to the crowd in January, Andy Traicoff, vice president of consumer sales and customer development, said, “To win in today’s environment, we need to be there for consumers with a variety of options to meet their needs. So, you might be thinking: ‘Thanks for a blinding glimpse of the obvious, Andy.’ True, it is obvious, but it’s also complex to execute. Size proliferation, speed ratings, load carrying capacity, treadwear warranties, and a seemingly endless list of no-name brands and lines can make it challenging for your teams behind the counter. We want to make it simple – simple to understand, simple to explain and simple to sell.”
Simplifying the process of buying tires seems to be a priority for both Bridgestone and Goodyear. Upon the announcement of TireHub, Traicoff said, “From Goodyear’s perspective, what we expect is the best-in-class distributor of tires on a national basis to our retail customers and to all of our customers, whether they’re independent dealers, car dealers, national accounts, government or anybody that we supply. And we think we’ve set as we’ve done this joint venture, we think TireHub is set up for success today.
“I think what we want our retailers to [understand] is that Goodyear is committed to winning together with them as we move forward. They should see this as a positive step and an opportunity to get closer to Goodyear, to take full advantage of our programs, all of the products that we sell and the depth and breadth of the Goodyear, Dunlop and Kelly portfolio.”
Note: Article to be updated.