The Goodyear Tire & Rubber Company Business report FY2006
Business Highlights
Annual Tire Unit
Sales Mix
The worldwide tire unit sales in the replacement and OE markets
during the period indicated were as follows.
(In million of tires) | 2006 | 2005 | 2004 | 2003 | |
North American | Replacement tire units | 61.6 | 71.2 | 70.8 | 68.6 |
OE | 29.3 | 30.7 | 31.7 | 32.6 | |
European Union | Replacement tire units | 46.0 | 46.0 | 43.9 | 43.9 |
OE | 17.5 | 18.3 | 18.9 | 18.4 | |
Eastern
Europe |
Replacement tire units | 16.4 | 15.8 | 15.4 | 14.8 |
OE | 3.6 | 3.9 | 3.5 | 3.1 | |
Latin America | Replacement tire units | 14.9 | 15.0 | 15.0 | 14.2 |
OE | 6.3 | 5.4 | 4.6 | 4.5 | |
Asia pacific | Replacement tire units | 13.1 | 13.9 | 14.5 | 9.1 |
OE | 6.3 | 6.2 | 5.0 | 4.3 | |
Total | Replacement tire units | 152.0 | 162.0 | 159.6 | 150.6 |
OE | 63.0 | 64.4 | 63.7 | 62.9 | |
Total | 215.0 | 226.4 | 223.3 | 213.5 |
Worldwide replacement unit
sales in 2006 decreased from 2005 due primarily to an overall decline
in the consumer replacement market as well as strategic share reduction
in the lower value segment in North American Tire. OE unit sales in
2006 decreased from 2005 due primarily to North American Tire, driven
by lower vehicle production, and European Union Tire due to the Company's
selective fitment strategy and a weak OE consumer market, offset by
increased unit sales in Latin American Tire due to increased market
share. The USW strike also decreased units by 2.8 million.
Contracts
With the 2007 Ford Shelby Mustang GT500, the Company again
gets the honors. The vehicle is equipped with Goodyear Eagle F1 Supercar
tires -- in size P255/45R18 in the front and P285/40R18 in the rear.
The ultra-high performance Mustang, with limited numbers of the car
appearing this summer, generates more than 450 horsepower. The project
developed from a collaboration between performance car legend Carroll
Shelby and Ford's Special Vehicle Team (SVT). Goodyear engineers worked
with the SVT designers to develop the tires needed for the car. Goodyear's
Eagle F1 Supercar tire features an ultra-performance tread compound,
which helps provide exceptional dry traction and cornering grip. (From
a press release by the company on 15.Jun)
Restructuring
To maintain global competitiveness, the Company has implemented
rationalization actions over the pas several years for the purpose of
reducing excess and high-cost manufacturing capacity and to reduce associate
headcount.
<Plant closure>
North American Tire:
- Tyler, Texas (in the first quarter of 2008): Tire manufacturing facility
- Valleyfield, Quebec (second quarter of 2007): Tire manufacturing facility
European Union Tire:
-Washington, UK (2006): Passenger tire facility
Eastern Europe Tire
- Casablanca, Morocco (first quarter of 2007): Tire manufacturing business
Asia Pacific Tire:
-Upper Hutt, New Zealand (2006): Passenger tire facility
In September 2006, the Company has agreed to sell its global tire fabric operations to Hyosung Corporation, pending government and regulatory approvals. The transaction is also subject to certain closing conditions. The Company and its affiliates will receive approximately $80 million for their tire fabric manufacturing plants and assets, which include operations in Decatur, Alabama; Utica, New York; Americana, Brazil; and Colmar-Berg, Luxembourg, subject to post-closing adjustments. The facilities, which employ about 1,000 people, produce and treat fabric that is used in Goodyear's tires. In addition, Goodyear and Hyosung would, upon closing, sign a multi- year supply agreement. Goodyear anticipates purchases of approximately $350 million to $400 million in the first year. (From a press release by the company on Set. 7, 2006)
R&D
R&D Expenditure
At the year end (In millions US$) | 2006 | 2005 | 2004 | 2003 |
R&D expenditure | 329 | 365 | 364 | 339 |
New product development
In a dramatic move to lower trucking fleets' and owner-operators'
total operating costs, the Company introduced a new fuel-efficient
commercial tire technology and three new tires for long-haul trucks
at the Great American Trucking Show. The company's new Fuel Max Technology
is focused on trucking's fuel and tire costs. The line includes new
steer, drive and trailer tires and retreads for a complete "cradle-to-grave"
tire system for trucking fleets and owner- operators. An 18-wheeler
outfitted with tires featuring Fuel Max Technology could achieve up
to 4 percent improved fuel economy. (From a press release by the company
on Aug.24)
Investment Activities
in millions US$ | FY2006 | FY2005 | FY2004 |
North American Tire | 248 |
237 |
176 |
European Union Tire | 133 | 126 | 103 |
Eastern Europe, Middle East and Africa Tire | 58 | 51 | 56 |
Latin American Tire | 67 | 72 | 65 |
Asia Pacific Tire |
70 | 70 | 66 |
Total Tires | 576 | 556 | 466 |
Engineered Products | 34 | 33 | 30 |
Total Segment Capital Expenditures | 610 | 589 | 496 |
Corporate | 61 | 45 | 33 |
Total | 671 | 634 | 529 |