The Goodyear Tire & Rubber Company Business report FY2008
Business Highlights
Business Overview
The worldwide tire unit sales in the replacement and OE markets during the period indicated were as follows.
-The decrease in worldwide tire unit sales of 17.2 million units, or 8.5% compared to 2007, included a decrease of 9.4 million OE units, or 15.7%, due primarily to decreases in the consumer markets in North American Tire and EMEA due to recessionary economic conditions resulting in lower demand for new vehicles, and a decrease of 7.8 million units, or 5.5%, in replacement units, primarily in North American Tire and EMEA. North American Tire consumer replacement volume decreased 3.9 million units, or 7.4%, and EMEA consumer replacement volume decreased 2.5 million units, or 4.6%. The decline in consumer replacement volume is due in part to recessionary economic conditions in the U.S. and Europe.
Acquisition
-In October 2008, the Company acquired the remaining 25% ownership interest in Goodyear Dalian Tire Company Ltd., its tire manufacturing and distribution subsidiary in China.
Rationalizations
-Rationalization actions in 2008 consisted primarily of the closure of the Somerton, Australia tire manufacturing facility, the closure of the Tyler, Texas mix center, and the Company's plan to exit 92 of our underperforming retail stores in the US Other rationalization actions in 2008 related to plans to reduce manufacturing, selling, administrative and general expenses through headcount reductions in all of its strategic business units
The worldwide tire unit sales in the replacement and OE markets during the period indicated were as follows.
(In million of tires) | 2008 | 2007 | 2006 | |
North American | Replacement tire units | 51.4 | 55.7 | 61.6 |
OE | 19.7 | 25.6 | 29.3 | |
Europe, Middle East and Africa Tire | Replacement tire units | 55.9 | 56.8 | 62.4 |
OE | 17.7 | 20.8 | 21.1 | |
Latin America | Replacement tire units | 13.9 | 14.7 | 14.9 |
OE | 6.1 | 7.1 | 6.3 | |
Asia pacific | Replacement tire units | 12.9 | 12.7 | 13.1 |
OE | 6.9 | 6.3 | 6.3 | |
Total | Replacement tire units | 134.1 | 141.9 | 152.0 |
OE | 50.4 | 59.8 | 63.0 | |
Total | 184.5 | 201.7 | 215.0 |
-The decrease in worldwide tire unit sales of 17.2 million units, or 8.5% compared to 2007, included a decrease of 9.4 million OE units, or 15.7%, due primarily to decreases in the consumer markets in North American Tire and EMEA due to recessionary economic conditions resulting in lower demand for new vehicles, and a decrease of 7.8 million units, or 5.5%, in replacement units, primarily in North American Tire and EMEA. North American Tire consumer replacement volume decreased 3.9 million units, or 7.4%, and EMEA consumer replacement volume decreased 2.5 million units, or 4.6%. The decline in consumer replacement volume is due in part to recessionary economic conditions in the U.S. and Europe.
Acquisition
-In October 2008, the Company acquired the remaining 25% ownership interest in Goodyear Dalian Tire Company Ltd., its tire manufacturing and distribution subsidiary in China.
Rationalizations
-Rationalization actions in 2008 consisted primarily of the closure of the Somerton, Australia tire manufacturing facility, the closure of the Tyler, Texas mix center, and the Company's plan to exit 92 of our underperforming retail stores in the US Other rationalization actions in 2008 related to plans to reduce manufacturing, selling, administrative and general expenses through headcount reductions in all of its strategic business units
R&D
At the year end (In millions US$) | 2008 | 2007 | 2006 |
R&D expenditure | 366 | 372 | 342 |
R&D structure
-The Company owns and operates three research and development facilities and technical centers, and three tire proving grounds
Investment Activities
Capital Expenditure
Overseas investment
-In February 2008, the Company announced that it will ask TC Debica to nearly triple its commercial tire production for Goodyear, from 1,700 to 5,000 tires per day, to meet the increasing demand for technically advanced, high-quality commercial truck tires in Europe. Goodyear has had a majority ownership interest in TC Debica, Poland's largest tiremaker, since 1995. The Company estimates that the expansion would require an investment of more than $200 million. TC Debica currently employs 2,500 and the investment would create 350 to 400 new jobs at TC Debica. The majority of the tires currently produced at the plant are sold to Goodyear or Goodyear affiliates, under the Goodyear, Debica, Dunlop, Fulda and Sava brands. Goodyear announced in April 2007 a more limited proposal to increase truck tire production at Debica with an $8.5 million investment. That project is continuing and will be in addition to the expansion plans just announced. (From a press release on Feb. 26, 2008)
-In June 2008, the Company announced that it would capitalize on worldwide growth in demand for its high-value-added tires, further develop its strong emerging market businesses, enhance its global supply chain and increase its cost reduction efforts. Growth opportunities include: Investment of up to $500 million to increase Goodyear's presence in China through a relocation and expansion of its manufacturing plant in Dalian to facilitate increased production of high-value-added consumer and commercial tires for the Asia-Pacific region. Investments of $500 million to $700 million over five years to modernize four US manufacturing plants. Investments of up to $600 million to expand production in Brazil and Chile. Investments of approximately $500 million to modernize and expand production in Germany and Poland. (From a press release on Jun 26, 2008)
(in millions US$) | FY2008 | FY2007 | FY2006 |
North American Tire | 449 | 281 | 248 |
Europe, Middle East and Africa Tire | 315 | 241 | 199 |
Latin American Tire | 150 | 115 | 76 |
Asia Pacific Tire |
106 | 74 | 70 |
Total Segment Capital Expenditures | 1,020 | 711 | 593 |
Corporate | 29 | 28 | 44 |
Total | 1,049 | 739 | 637 |
Overseas investment
-In February 2008, the Company announced that it will ask TC Debica to nearly triple its commercial tire production for Goodyear, from 1,700 to 5,000 tires per day, to meet the increasing demand for technically advanced, high-quality commercial truck tires in Europe. Goodyear has had a majority ownership interest in TC Debica, Poland's largest tiremaker, since 1995. The Company estimates that the expansion would require an investment of more than $200 million. TC Debica currently employs 2,500 and the investment would create 350 to 400 new jobs at TC Debica. The majority of the tires currently produced at the plant are sold to Goodyear or Goodyear affiliates, under the Goodyear, Debica, Dunlop, Fulda and Sava brands. Goodyear announced in April 2007 a more limited proposal to increase truck tire production at Debica with an $8.5 million investment. That project is continuing and will be in addition to the expansion plans just announced. (From a press release on Feb. 26, 2008)
-In June 2008, the Company announced that it would capitalize on worldwide growth in demand for its high-value-added tires, further develop its strong emerging market businesses, enhance its global supply chain and increase its cost reduction efforts. Growth opportunities include: Investment of up to $500 million to increase Goodyear's presence in China through a relocation and expansion of its manufacturing plant in Dalian to facilitate increased production of high-value-added consumer and commercial tires for the Asia-Pacific region. Investments of $500 million to $700 million over five years to modernize four US manufacturing plants. Investments of up to $600 million to expand production in Brazil and Chile. Investments of approximately $500 million to modernize and expand production in Germany and Poland. (From a press release on Jun 26, 2008)