1. Home
2. Supplier Database
3. Major Suppliers
4. The Goodyear Tire & Rubber Company
5. The Goodyear Tire & Rubber Company Business Report FY ended Dec. 2015

The Goodyear Tire & Rubber Company Business Report FY ended Dec. 2015

Factor
1) Net Sales
-The Company's net sales in the fiscal year ended December 31, 2015 of USD 16,443 million represented a 9.3% decrease from the previous year. Sales decreased primarily because of unfavorable foreign currency exchange causing a negative USD 1,563 million impact, lower sales in other tire-related businesses such as third-party chemical sales causing a loss of USD 283 million, and a decline in price and product mix of USD 83 million. These declines were partially offset by higher sales volumes specifically in the Asia Pacific and EMEA regions, resulting in a sales increase of USD 308 million.

2) Operating Income
-In the fiscal year ended December 31, 2015, the Company's operating income increased by 18.1% over the previous year to USD 2,022 million. The increase in operating income was primarily due to a decline in raw material costs of USD 594 million, which was partially offset by higher conversion costs of USD 149 million, unfavorable foreign currency impact of USD 145 million, and increased selling, administrative, and general expense costs of USD 70 million.

Dissolution of alliance with Sumitomo Rubber Industries

-The Company and Sumitomo Rubber Industries, Ltd. (SRI) executed an agreement to dissolve the global alliance agreement and joint ventures on June 4, 2015. SRI will acquire the Dunlop trademark license of original equipment tires for Japanese automakers in North America, and the exclusive usage of the Dunlop trademark for other 33 countries including Russia, Middle East and African countries. The Company will obtain the ownership of the Dunlop trademark license in Europe and for replacement tires in North America. The Company will acquire the European tire plant Goodyear Dunlop Tires Europe B.V., and Nippon Goodyear Ltd. in Japan. SRI will acquire the North American plant, Goodyear Dunlop Tires North America Ltd., a test track associated with the plant, and Dunlop Goodyear Tires Ltd. in Japan. The joint ventures established for procurement and technology development will also be dissolved. On October 1, 2015, the Company and Sumitomo Rubber Industries, Ltd. completed the dissolution of the global alliance between the two parties.

Restructuring

-The Company announced it will combine its North America and Latin America businesses into one Americas business unit, effective January 1, 2016. The combined business will serve customers and consumers more effectively and efficiently by integrating processes such as product development, market forecasting, and product supply. All manufacturing plants in the combined region – including the new Americas plant in San Luis Potosi, Mexico, scheduled to open in 2017 – will be leveraged to serve all customers in Mexico, Latin America and North America. (From a press release on December 1, 2015)

Business Partnerships

-The Company and Sumitomo Rubber Industries Ltd. (SRI) have reportedly entered into a new long-term agreement regarding the development and production of Goodyear-brand replacement tires in Japan. The two companies have just recently agreed on the dissolution of their alliance for global tire businesses. However, in the replacement tire market in Japan, the Company will use SRI's development and supply capacities to supply tires that will meet the needs of Japanese customers. The Company intends to strengthen its presence in Japan by ensuring a stable supply of replacement tires. (From an article in the Nikkan Jidosha Shimbun on June 9, 2015)

Recent Developments

-The Company teamed with Volkswagen of America, Inc. to set a new Guinness World Records achievement for the "lowest fuel consumption—48 U.S. contiguous States for a non-hybrid car" with a 81.17 mpg rating. The record-setting Volkswagen Golf TDI was equipped with Assurance Fuel Max tires. (From a press release on July 8, 2015)

-The Company has reached a supply agreement with Yihai Food and Oil Industry in China for silica derived from rice husk ash. The Company will begin using the silica this year in a consumer tire that will be manufactured in its factory in Pulandian, Liaoning Province, China, and sold in China. The Company has tested silica derived from rice husk ash over the past two years at its Innovation Center in Akron, Ohio and found its impact on tire performance to be equal to traditional sources. In addition to the agreement with Yihai, the Company is negotiating agreements with other suppliers. (From a press release on June 9, 2015)

-The Company's products are featured on 75% of the top 15 SUVs and light trucks sold in the U.S. in 2015.

Major Contracts

Outlook

-The Company expects that its tire sales volumes in the fiscal year ending December 31, 2016 will increase approximately 3% from the 164.8 million units sold in 2015, excluding the operations of the Company's Venezuelan subsidiary.

R&D Facilities

-The Company has two innovation centers located in Akron, Ohio, U.S., and Colmar-Berg, Luxembourg, as well as three research and development centers in Hebron, Ohio, U.S.; Hanau, Germany; and Pulandian, China. The Company also has seven tire proving grounds.

-The Company announced that it has established its first development center in China. Located at the Company's tire manufacturing facility in Pulandian, Liaoning Province, the new center expands its capabilities in the Asia Pacific region and will enable it to increase the speed and efficiency of tire development, especially for China-based automakers. Core tire technology will continue to be developed in the Company's global Innovation Centers in Akron, Ohio and Colmar-Berg, Luxembourg. Development activities at the new center will focus on product customization for original equipment fitments and project support services. (From a press release on March 26, 2015)

Product Development

Fuel efficient tires with Agilon performance silica
-The Company announced that it has begun using Agilon performance silica by PPG Industries to increase the fuel efficiency of its tires. This new silica will be first used in the Company's EfficientGrip SUV tire, which is being launched this month in Latin American markets. Tires containing the silica will be introduced in other regions within the next year. (From a press release on May 5, 2015)

Concept tires shown at 2015 Geneva International Motor Show
-The Company announced that it will unveil two concept tires at the Geneva International Motor Show 2015. The first concept, "BHO3", offers the possibility of charging electric cars batteries by converting the heat generated by the rolling tire into electrical energy. The second concept, "Triple Tube", contains three tubes that adjust tire inflation pressure in response to changing road conditions, delivering new levels of performance and versatility. (From a press release on March 3, 2015)

Electric vehicle quiet tire technology
-As part of CityHush, a project sponsored by the European Union to reduce noise in cities, the Company has developed a concept tire for use in electric vehicles. The concept tire takes into account a variety of factors such as road surface texture, tire dimensions, tire materials, and tire design.

Interlaced strip technology
-The Company has developed a technology which reinforces the crown area of the tire with a belt, which allows the tire to carry 10% greater loads.

Radio-frequency Identification (RFID) technology
-The Company introduced RFID microchips into truck tires, which then interfaces with the Company's internet-based tire management program called FleetOnlineSolutions. The microchip allows tires to be quickly identified with scanners, thus providing significant time savings for fleet owners.

Patents

-As of December 31, 2015, the Company owns approximately 2,000 product, process and equipment patents issued by the United States Patent Office and approximately 3,500 patents issued or granted in other countries around the world. The Company has approximately 500 applications for United States patents pending and approximately 2,200 patent applications on file in other countries around the world.

*The USD 140 million investment related to the construction of the Company's new manufacturing facility in San Luis Potosi, Mexico is included in the corporate capital expenditure category.

-The Company's capital expenditures in the fiscal year ended December 31, 2015 were invested primarily into the modernization and expansion of manufacturing capacity in the U.S., Brazil, Germany, and China, as well as the construction of the new manufacturing facility in San Luis Potosi, Mexico.

Investments in U.S.

-Sumitomo Rubber Industries, Ltd. will gear up production of high value-added tires for SUVs and high-performance vehicles at its tire plant in Buffalo, New York, U.S. The company will invest slightly less than JPY 10 billion to introduce new production facilities at the plant and raise its capacity for producing high value-added tires. The Buffalo plant will maintain its daily production capacity of 15,000 units. The Buffalo plant is currently operated by a joint venture between the Company and Sumitomo Rubber Industries. When the alliance between the two companies is dissolved, Sumitomo Rubber will take over the plant as its sole plant in North America. By strengthening the Buffalo plant, Sumitomo Rubber will switch to production items that meet market needs in an effort to expand tire sales in North America. The Buffalo plant currently produces tires for passenger cars, trucks, and motorcycles. (From an article in the Nikkan Jidosha Shimbun on August 7, 2015)

Investments outside U.S.

-The Company announced that it will build a new tire factory in San Luis Potosi, Mexico to serve its customers in the Americas. The new factory, combined with investments in its existing U.S. and Canadian factories, will enable the Company to meet growing market demand for high-value-added (HVA) consumer tires in North America and Latin America. The new factory is scheduled to begin production in mid-2017 and will have a capacity of approximately six million tires per year. At full capacity, the factory will employ about 1,000 people. The total capital investment for the project is expected to be between USD 500 million and USD 550 million. (From a press release on April 24, 2015)