Goodyear chairman, president and CEO Rich Kramer is a mighty confident guy. He expressed his confidence in the tiremaker and its direction to its dealer base at February’s annual dealer meeting, and carried the theme at the company’s annual shareholder’s meeting on April 12.
In his first address to shareholders, Kramer said he was “pleased” with Goodyear’s 2010 performance, which “exceeded the company’s targets” even while piling up a net loss of $216 million against sales of $18.8 billion for 2010 and coming off a 2009 where Goodyear lost $375 million on sales of $16.3billion.
“By any measure, we have come out of the Great Recession as a better company, both now and for the future,” Kramer told shareholders. “We exceeded our targets in 2010, and I’m extremely pleased with our performance. It provides me with a level of confidence and optimism in our ability to continue to march toward achieving all of our goals.”
Kramer said Goodyear’s financial results reflected significant improvement in tire sales around the world, particularly in North America, which has been the tire industry’s slowest recovering region. He also credited the company’s price/mix improvements, the addition of new products, investment in targeted segments, and cost control efforts that had direct bottom line impact.
At the same time, fast rising raw material costs remain a concern. “In all regions, we effectively managed the impact of raw material cost increases – including record prices for natural rubber,” he said. “We successfully executed our price/mix strategy, which more than offset the increase in the cost of raw materials for the full year. Continued execution is a must in 2011 and beyond.
Looking forward to 2011 and beyond, Kramer said Goodyear will “be the leader in targeted market segments. We’ll have the right brands, channels and customers selling premium products through the channels where the margins are highest. Our focus is on profitable growth, not chasing volume for volume’s sake.
“Goodyear will continue to be first with customers. We have the best products and the best supply chain to serve our customers and help them grow their businesses. In North America, we were just awarded Supplier of the Year by Walmart. Out of the more than 25,000 suppliers to Walmart overall, only seven companies earned supplier of the year accolades. Goodyear was one of them. This is a tremendous honor and third-party affirmation that our supply chain improvements are working.
“And, finally, we will be competitively advantaged, in everything we do. I’m talking about products, marketing, supply chain and manufacturing. In 2011, we will invest more than $1 billion in capex to both sustain our business and to maximize our ability to grow profitably. Investments in products, equipment and plants will be aligned with our strategy and will allow us to maintain the highest possible level of flexibility throughout future economic cycles.
“Over the past few years, Goodyear associates and customers have heard me say that the tire industry is a great industry to be in,” Kramer said. “I believe that is truer now than ever before. Further, I believe that the future of our industry will be shaped by trends that offer clear advantages for Goodyear.”
