A little over a year ago, Goodyear acquired Cooper Tire for $2.5 billion, promising synergies among the two companies and streamlined services for dealers. So how are they doing that? What does it take to integrate two American powerhouse tiremakers?
In this episode of What’s Treading with Tire Review, presented by AAPEX 2022, we speak with Renee Radabaugh, a 35-year veteran with the Goodyear Tire & Rubber Co. who currently serves as its vice president of North America consumer channels and categories teams. Radabaugh oversees Goodyear’s consumer replacement tire business and most recently led the integration of sales and marketing activities between the two companies in the Americas.
Radabaugh gives us an update about how the integration is going and what it takes for Goodyear to incorporate a company the size of Cooper Tire into its existing business in the Americas. Listen below!
- What advantages does Radabaugh see with the integration of Goodyear and Cooper Tire (1:19)
- The work it takes to integrate sales and marketing efforts for two major tiremakers (2:37)
- Why during the integration, one of Goodyear’s goals has been to not “disrupt the continuity” of the business (4:39)
- The systems that Goodyear and Cooper are integrating, including distribution through TireHub and manufacturing (7:07)
- The synergies already realized as a result of the Goodyear-Cooper integration (9:19)
- How Goodyear is working to optimize its brands as it takes on more with Cooper Tire and long-run synergies the company is working toward (10:57)
- How Goodyear plans to maintain both the Cooper and Goodyear businesses and what Radabagh thinks dealers should know about integration efforts (13:37)
- An update on the latest between the integration with Goodyear and Cooper (15:41)
MW: The Cooper Tire acquisition is Goodyear’s largest in its 120-plus-year history. So I’m curious when you first heard the news, what was your reaction?
Renee Radabaugh: This news was really exciting. As you mentioned, it’s a huge acquisition for Goodyear. I was fortunate enough to be able to get started and work full-time on the integration last year. We’re coming up on our one-year anniversary (as of July), so it’s been really exciting
MW: A year in, what do you feel are the advantages of these two tiremakers coming together under the Goodyear name?
Radabaugh: Right off the bat, the Cooper brand is such a strong brand and it fits really nicely in the product portfolio with Goodyear brands. The Goodyear brand is a premium tier brand and the Cooper brand fits nicely as a mid-tier. Cooper has excellent all-terrain products. The products across all the categories are excellent. Plus, there are lots of other brands, including Mastercraft, Kelly, Dunlop… but those two key brands, Goodyear and Cooper, it’s like a perfect fit. As we learned more about the integration and as I started working with the legacy Cooper associates, I really started to understand our cultures are quite similar. We’re both 100-plus-year-old companies. They’re located in Finley, Ohio. We’re in Akron, Ohio. We have a similar culture. The integration has been pretty smooth. There’s still a lot more to do, but we’ve made a lot of progress so far.
MW: That’s great to hear. So, what does it take to really integrate the sales and marketing activities of two huge publicly traded corporations like Goodyear and Cooper? That’s such a large undertaking.
Radabaugh: You’re absolutely right. It’s a big, big project. Right from the beginning, we started out and created guiding principles for the integration. The number one was to maintain both of the businesses: the continuity of the Cooper business and the Goodyear business. We didn’t want to be very disruptive and create a lot of changes right up front. Another key guiding principle we’ve had is to learn from each other. So we’re looking at the processes and the systems that Cooper has and Goodyear has and trying to really take the best of both– that’s people and processes. We are following a very structured process to do this integration. It is challenging, but I think just going through it, with this structure that we’re doing and following these guiding principles, it’s been pretty smooth. And I have to say, as I’m out visiting with our customers, I feel like they are pretty supportive and they understand the size of the project. They’ve been positive about the progress that we’ve made so far, with what’s yet to come and with the opportunities that we all have.
MW: What are some of those changes that Goodyear has implemented either to streamline dealer communications, purchasing, etc. or internally that have been a big change as well?
Radabaugh: Some of the high-level functions, as you know, we now report our financials together. Finance was integrated early on. We started out pretty early on integrating some of the high-level management teams. We have legacy Cooper legacy people in manufacturing and in supply chain. More recently now, we have some leaders in marketing and sales and even the category group from the Cooper team, which has been great. That’s helped us a lot get started and get to know the team and understand all the processes and the systems. I think the integration of the people has begun and there’s still work to do there, particularly on the sales and marketing side. The customer-facing roles we’re being very diligent about and making sure that we, again, don’t disrupt the continuity of the businesses, but we’re making some good progress on that.
MW: So it all revolves around the idea of not interrupting the continuity of the business?
Radabaugh: Yes, absolutely. That’s something we were very cautious about. We didn’t want to interrupt service. We didn’t want to disrupt how customers work with their sales rep day to day. We’re working on that as we move forward in the integration, but another pretty big project that we’re working on is the systems integration. The ERP systems that do the billing and the day-to-day order entry, all those kind of backend systems. That’s a huge project and that’s underway as we speak. We have a lot of associates working on that now, both legacy Goodyear and legacy Cooper. Once we get the two systems integrated, that opens up a lot of opportunities for, if you’re a customer that currently buys Goodyear and Cooper products, then you can have one invoice and one truck can come to your warehouse. It’s really critical to get that done. There’s a huge focus and a lot of people working on that project right now.
MW: I heard in a recent earnings call from Goodyear’s President, Chairman and CEO Rich Kramer that Cooper is also being integrated slowly into TireHub. Is, is that right?
Radabaugh: Yes, there is a whole work stream. We have a team of people working on a distribution work stream. There’s a team working on products and brands. We still have a lot of work to do there, but one of the first steps was to have the Cooper product in TireHub.
MW: So, working on the systems is the big thing right now?
Radabaugh: It’s a big project, and a lot of these projects are going on simultaneously. If you think about the functions, there are supply chain, logistics, transportation. Manufacturing is a big one. There’s huge opportunity when we look across all of our manufacturing footprint of Cooper and Goodyear, huge opportunities there. But that’s a longer-term project, but they’re all happening simultaneously. The Cooper integration is impacting everybody at Goodyear and Cooper and we’re pulling in more and more resources to help us on these work streams as we work through it.
MW: Can you give me an example of some of the synergies that have already been realized between Goodyear and Cooper by combining operations?
Radabaugh: There are lots of synergies. Some of them are low-hanging fruit or relatively easy. You might have two vendors that we’re using for a particular process that we could consolidate into one. That type of thing has occurred. Consolidating some systems has occurred in the area of logistics. We actually just announced we consolidated two warehouses in Texas to one. We had two warehouses that were very close together. So there’s a lot of opportunity with transportation, logistics, etc. Some of the things that were fairly easier could happen quickly. There are other ones that are going take a lot longer or are dependent on a system. So the other area you had asked about earlier was communication. There was a trade show earlier this year in March that was combined Cooper-Goodyear. So yes, we are getting to that point where we’re going to be able to consolidate a lot more of those types of events and activities, too.
MW: Renee, I know you guys are in the thick of sorting out these changes, and they’re happening simultaneously with the integration efforts. I’m curious, in the long run, how do you feel having the Cooper brand under Goodyear will impact Goodyear’s consumer tire business, specifically consumer replacement?
Radabaugh: As I mentioned, it’s such a nice fit. They weren’t really overlapping in the marketplace, the Goodyear and the Cooper brand specifically. Goodyear’s a Tier 1 brand, we’re the innovation brand, and Cooper is what we call mid-tier, so it works out. It really fits nicely in the product screen. In the future, as we work through this, it just offers more opportunities for our customers and consumers to have that full portfolio of products and brands. There are lots of other brands. I keep talking about Goodyear and Cooper, but there are a lot of other excellent brands that fill out that portfolio for our customers. So yes, I think, in the long run, there’s just huge opportunity bringing the two companies together.
MW: Would there be looking at you know discontinuing a brand that might be replicated on one side or the other?
Radabaugh: That’s part of the work that’s going on as we speak. We have a product and brand workstream within our group in the marketing and category teams. So they’re looking at where there might be overlap. We want to optimize the brands that we offer. We want to offer the fullest screen that we can to our customers and end consumers ultimately. There have been no decisions around discontinuing brands or anything like that*. It’s still in the works, but it’s about having that offering that’s the most complete for our consumers.
*Since we filmed this episode in late April, Goodyear has added the Dick Cepek Tires & Wheels line into the Mickey Thompson product line. The Dick Cepek website reads: “Dick Cepek is now undisputably Mickey Thompson.
MW: So, short-term and long-term, how do you see Goodyear’s acquisition of Cooper impacting dealers and their businesses?
Radabaugh: For me, it’s just positive. It’s all positive. I think our dealers in the short-term and long-term, will see a lot of opportunities. We talked about some of these synergies. There are customers now that buy Goodyear and Cooper, and these synergies will help them with efficiencies and simplification in doing business with the new Goodyear. There’s still a lot of work that has to be done, but I feel like it’s going to be positive for our customers.
MW: Is there anything else that you’d like customers to know or the industry to know about these two players coming together as they streamline the business?
Radabaugh: The only thing I’d point out is that the key principle is to maintain both of our businesses. We’ve been doing that. We have been actually introducing new products during all of this, on the Goodyear side and Cooper Mastercraft. We actually introduced our new EV tire, our first one in the replacement market, The Goodyear Electric Drive GT. Products like that were innovating on with both sides, Goodyear Cooper. We’re still announcing new products and staying relevant in the market. That was important for us to maintain the continuity of the business as we go through this really complicated integration.