2012 was not a good year for the Goodyear Tire & Rubber Co. The tiremaker saw full year sales fall 8% vs. the year prior, while operating income fell by $120 million compared to 2011 results.

The fourth quarter was particularly hard, with quarterly sales falling 11% year-over-year to $5 billion, even as operating income of $272 million was up 39% YoY. Much of that improvement came from reduced raw material costs ($191 million) and a price/mix improvement of $20 compared to the same period in 2011.

"Our 2012 performance marks the second consecutive year we have exceeded $1.2 billion in segment operating income in a low-volume environment," said Rich Kramer, chairman and CEO. "These results have been driven by North American Tire’s performance, which has momentum and, more importantly, sustainability.

"In addition, we are beginning to see the benefits of the strategic investments we are making in China," Kramer said. "We feel very positive about the progress made in our North American, Latin American and Asia Pacific businesses in 2012 and are confident in our ability to continue delivering improved profitability. As a result of our view of continued weakness in the European economy and its effects on the auto and tire industries, we are reducing our 2013 segment operating income expectation and are taking actions to ensure long-term competitiveness in the region."

Goodyear’s North American Tire unit once again saw tire unit sales fall year-over-year, dropping from 66 million tires in 2011 to just 62.6 million last year. As a result, dollar sales fell from $9.86 billion to $9.67 billion in 2012. Buoyed by a significant rise in operating margin (5.3% in 2012 vs. 2.8% in 2011), the unit’s operating income rose to $514 million from $276 million in 2011.

For 2013 in North America, Goodyear expects the consumer replacement market to be flat to up 2% and consumer OE to be up approximately 5%. Commercial replacement and OE volumes are expected to remain at about 2012 levels.

Reflecting harsh market conditions, Goodyear’s Europe/Middle East and Africa unit posted tough results. Unit sales for 2012 were 62.7 million tires, down substantially from 2011’s 74.3 million tires, pushing revenue down to $6.88 billion from 2011’s $8.04 billion. Operating income fell from $627 million in 2011 to $252 million last year, while operating margins dropped from 7.8% to $3.7%.

In addition to closing its plant in Amiens, France, which was announced last month, Goodyear plans other action in the Europe/Middle East/Africa regions that will “eliminate approximately 6 million units of high-cost capacity and result in about $75 million of annual profit improvement.”