As Goodyear Tire & Rubber Co. was reporting its 2013 financial results on Feb. 13, word came from Japan that the tiremaker was seeking an end to its alliance with Sumitomo Rubber Industries.
Stating that SRI had engaged in “anticompetitive conduct in violation of applicable antitrust law,” Goodyear CFO Laura Thompson said the company “began arbitration proceedings seeking the dissolution of that global alliance.” At press time, it was not clear what SRI allegedly did, where the actions took place or what antitrust laws were supposedly violated.
Signed in September 1999, the Goodyear-SRI alliance launched Goodyear Dunlop Tires Europe (GDTE) and Goodyear Dunlop Tires North America (GDTNA), both 75% owned by Goodyear and 25% by SRI, as well as another joint venture for tire sales in Japan 25% owned by Goodyear and 75% by SRI.
Also unclear at press time was the future of the Dunlop brand in North America and Europe, which were being marketed by Goodyear. The alliance with SRI gave Goodyear the rights to the Dunlop brand on those two continents.
On Feb. 13, SRI said it was aware that Goodyear had filed a dissolution petition with the International Chamber of Commerce (it was filed on Jan. 10), but offered no other comment at that time. Experts suggest, though, that it will take months – even years – for the Chamber to act and the alliance to be unwound.
“We are ready to negotiate for the dissolution of the alliance if Goodyear strongly hopes so,” SRI president Ikuji Ikeda said at a press conference in Tokyo today.
According to Goodyear’s 10-K filing on Feb. 12, “Subject to the arbitration proceedings,” there is a provision covering SRI’s “exit rights” under certain circumstances, which would “require Goodyear to purchase its (SRI’s) ownership interests in GDTE and GDTNA.”
Such a purchase price would be negotiated by the two parties, the 10-K said, and would give Goodyear full rights to the Dunlop brand in North America and Europe. If “no mutually agreed purchase price was determined,” the price would be set through binding arbitration.