The Goodyear Tire & Rubber Company is an American multinational tire manufacturing company founded in 1898 by Frank Seiberling and based in Akron, Ohio. Goodyear manufactures tires for automobiles, commercial trucks, light trucks, motorcycles, SUVs, race cars, airplanes, farm equipment and heavy earth-mover machinery. It also produced bicycle tires from its founding until 1976.
The company was named after American Charles Goodyear, inventor of vulcanized rubber. The first Goodyear tires became popular because they were easily detachable and required little maintenance.
Goodyear is also known for the Goodyear Blimp. Though Goodyear had been manufacturing airships and balloons since the early 1900s, the first Goodyear advertising blimp flew in 1925. Today it is one of the most recognizable advertising icons in America. The company is the most successful tire supplier in Formula One history, with more starts, wins, and constructors' championships than any other tire supplier. They pulled out of the sport after the 1998 season. It is the sole tire supplier for NASCAR series.
Goodyear is a former component of the Dow Jones Industrial Average. The company opened a new global headquarters building in Akron in 2013.
Early history 1898–1926
The first Goodyear factory opened in Akron, Ohio, in 1898. The thirteen original employees manufactured bicycle and carriage tires, rubber horseshoe pads, and poker chips. The company grew with the advent of the automobile.
In 1901 Frank Seiberling provided Henry Ford with racing tires. In 1903, Paul Weeks Litchfield was granted a patent for the first tubeless automobile tire. By 1908 Ford was outfitting his Model T with Goodyear tires. In 1909 Goodyear manufactured its first aircraft tire.
In 1911 Goodyear started experimenting with airship design. It later manufactured airships and observation balloons for the United States Army Air Service during World War I. The transport and reconnaissance capabilities that Goodyear provided contributed significantly to the Allied victory.
In 1916, Litchfield found land in the Phoenix area suitable for growing long-staple cotton, needed for reinforcing rubber in tires. The 36,000 acres purchased were controlled by the Southwest Cotton Company, formed with Litchfield as president. (This included land that would develop into the towns of Goodyear and Litchfield Park.)
In 1924, Litchfield, as Goodyear Vice President, forged a joint venture with the German Luftschiffbau Zeppelin Company to form the Goodyear-Zeppelin Corporation.
By 1926 Goodyear was the largest rubber company in the world. Only four years earlier it was forced to temporarily halt production of racing tires due to heavy competition. Nevertheless, the popularity of the Goodyear tire on the racing circuit led to a popular demand for the return of the brand.
On August 5, 1927, Goodyear had its initial public offering and was listed on the New York Stock Exchange.
By 1930 Goodyear had pioneered what would later become known as "tundra tires" for smaller aircraft — their so-called low inflation pressure "airwheel" aviation wheel-rim/tire sets were initially available in sizes up to 46 inches (117 cm) in diameter.
For the next sixty years Goodyear grew to become a multinational corporation with multibillion-dollar earnings. It acquired their rival Kelly-Springfield Tire in 1935. During World War II Goodyear manufactured F4U Corsair fighter planes for the U.S. Military. Goodyear ranked 30th among United States corporations in the value of wartime production contracts. WWII forced the dissolution of the Goodyear-Zeppelin partnership in December 1940. By 1956 they owned and operated a nuclear processing plant in Ohio.
In 1944, Goodyear created a subsidiary in Mexico in a joint venture with Compañía Hulera, S.A. de C.V., Compañía Hulera Goodyear-Oxo, S.A. de C.V. or Goodyear-Oxo.
Radial tire transition
Of the five biggest U.S. tire firms in 1970, today only Goodyear remains independent, due to the challenge posed by radial tire technology, and the varied responses. At the time, the entire U.S. tire industry produced the older bias-ply technology. Estimates to fit the factories with a new set of machinery and tools for making this new product were between $600 million and $900 million. This was a substantial amount in a low margin business with sales revenue in the low billions.
The U.S. market was slowly shifting towards the radial tire, as had already been the case in Europe and Asia. In 1968, Consumer Reports, an influential American magazine, acknowledged the superiority of radial construction, first developed in 1946 by Michelin.
When Charles J. Pilliod Jr. became CEO in 1974, he faced a major investment decision regarding the radial tire, which today has a market share of nearly 100%. Despite heavy criticism at the time, Pilliod invested heavily in new factories and tooling to build the radial tire.
Sam Gibara, who headed Goodyear from 1996 to 2003, has noted that without the action of Pilliod, Goodyear "wouldn't be around today." 
Sales for 1969 topped $3 billion, five years later sales topped $5 billion and it boasted operations in thirty-four countries. In 1978 the original Akron plant was converted into a Technical Center for research and design. By 1985 worldwide sales exceeded $10 billion.
Goodyear Aerospace, a holding that developed from the Goodyear Aircraft Company after World War II designed a supercomputer for NASA's Goddard Spaceflight Center in 1979, the MPP. The subsidiary was sold in 1987 to the Loral Corp. as a result of restructuring.
In 1987, Goodyear formed a business partnership with Canadian tire retailer, Fountain Tire.
Goldsmith affair 1986
In October 1986, Goodyear was a victim of a Greenmail attack. British financier James Goldsmith in conjunction with the investment group Hanson purchased 11.5% of Goodyear's outstanding common stock. They threatened to take the company over. On November 20, 1986, Goodyear acquired all of the 12,549,400 shares of stock held by Goldsmith's group at an above-market price of $49.50 per share. Goodyear also made a tender offer for up to 40 million shares of its stock from other shareholders at $50 per share. The tender offer resulted in Goodyear buying 40,435,764 shares of stock in February 1987.
As a result, Goodyear took a charge of $224.6 million associated with a massive restructuring plan. The company closed plants in Cumberland, Maryland; New Toronto, Ontario, Canada; and Windsor, Vermont. It sold its Goodyear Aerospace business to Loral Corporation for $588 million and its Motor Wheel business to MWC Inc. for $175 million. Two subsidiaries involved in agricultural products, real estate development, and a resort hotel in Arizona were sold for $220.1 million.
1990 to present
The last major restructuring of the company took place in 1991. Goodyear hired Stanley Gault, former CFO of Rubbermaid to expand the company into new markets. The moves resulted in 12,000 employees being laid off.
In 2005, Titan Tire purchased the farm tire business of Goodyear, and continues manufacturing Goodyear agricultural tires under license. This acquisition included the plant in Freeport, Illinois.
On July 10, 2008, Goodyear was recognized as one of America's most respected companies by the Reputation Institute (RI) and Forbes magazine. Goodyear ranked 16th on the magazine's third annual listing of companies with the best reputations in the United States.
The list is based on the results RI's Global Pulse consumer opinion survey, which measures the overall respect, trust, esteem, admiration and good feelings consumers hold toward the world's largest companies.
Scores are based on RI's seven dimensions of reputation: products/services, innovation, workplace, citizenship, governance, leadership and performance. RI said the 2008 survey indicates that consumers are most influenced by a company's high-quality products and services as well as its governance and citizenship.
Goodyear's score of 76.0, represented a 7.54 point increase over 2007 and was the largest year-over-year improvement of any company on the list. Goodyear is the only tire company on the top-75 list.
The recognition from RI and Forbes is the fifth significant honor for Goodyear in 2008. The company was named the world's most admired company in the motor vehicle parts industry by Fortune magazine.Audit Integrity Inc. and Forbes magazine ranked Goodyear sixth on their list of America's most trustworthy companies.The Wall Street Journal recognized Goodyear for leading shareholder return for the past five years in the automotive category. Goodyear was also ranked among the Top 100 Corporate Citizens selected by CRO magazine.
The company announced in summer 2009 that it will close its tire plant in the Philippines as part of a strategy to address uncompetitive manufacturing capacity globally by the end of the third quarter.
Goodyear announced plans to sell the assets of its Latin American off-road tire business to Titan Tire for US$98.6 million, including the plant in Sao Paulo, Brazil and a licensing agreement that allows Titan to continue manufacturing under the Goodyear brand. This deal is similar to Titan's 2005 purchase of Goodyear's US farm tire assets.
In 2011, more than 70 years after the dissolution of the Goodyear-Zeppelin Corporation, it is announced that Goodyear will partner with Zeppelin again (the legacy company Zeppelin Luftschifftechnik) to build more zeppelins together.
- 1898: Goodyear founded
- 1899: automobile tires added to the original product line of bicycle tires, carriage tires and horseshoe pads
- 1901: Seiberling makes racing tires for Henry Ford
- 1903: Paul Litchfield granted patent on first tubeless automobile tire (Litchfield would go on to become president of Goodyear-Zeppelin, then board chairman)
- 1908: Ford's Model T is outfitted with Goodyear tires
- 1909: first pneumatic aircraft tire
- 1911: first airship envelope
- 1912: Goodyear blimp first debuts
- 1917: made airships and balloons for the U.S. military during World War I
- 1919: tires on the winning car at the Indianapolis 500
- 1924: Zeppelin patents acquired, joint venture Goodyear-Zeppelin Corporation formed with the German company
- 1925: Pilgrim is launched, the first commercial non-rigid airship to use helium
- 1926: world's largest rubber company, based on sales of $230,161,356
- 1927: initial public offering 
- 1929: construction of world's largest airship dock started in Akron
- 1935: acquired Kelly-Springfield Tire
- 1937: first American-made synthetic rubber tire
- 1940: in December, Goodyear-Zeppelin Corporation dissolved with WWII straining partnership
- 1942: awarded contract to build Corsair fighter planes
- 1944: tire testing begins near San Angelo, Texas
- 1947: first nylon tires developed
- 1949: first television advertising with sponsorship of "The Goodyear Review," hosted by Paul Whiteman
- 1954: first nationwide strike in company's history lasted 52 days
- 1956: Goodyear-operated U235 atomic processing plant opens in Ohio
- 1957: Goodyear Proving Grounds for tire testing, near San Angelo, Texas, is rebuilt
- 1958: production of foam-padded instrument panels begun for 1959 model cars
- 1962: Goodyear racing tires used on more winning stock and sports cars than any other brand
- 1963: Goodyear produces its one billionth tire
- 1965: radial-ply tires made available in a full range of sizes to auto manufacturers
- 1967: Goodyear introduces the Polyglas tire, one of the first wide-tread bias-belted fiberglass tires, which along with similar tires from competitors such as the Firestone Wide-Oval would become regular equipment on 1970 to 1974 models, which would be superseded by radial tires beginning in 1975.
- 1969: sales reach $3 billion
- 1970: first tires on the moon (Apollo 14)
- 1974: sales reach $5 billion
- 1975: all tires used in Indianapolis 500 supplied by Goodyear
- 1976: Chemical Division shipped first shatterproof polyester resin bottles
- 1977: industry's first all-season tire (Tiempo) introduced
- 1978: Akron plant converted into Technical Center for R&D
- 1983: three billionth tire produced
- 1984: worldwide sales exceed $10 billion
- 1986: James Goldsmith takeover attempt and resulting restructuring
- 1987: completion of the California - Texas "All American" oil pipeline
- 1991: Aquatred tire introduced
- 1992: began selling tires at Sears stores
- 1993: opened first tire store in Beijing, China
- 1993: inauguration of Dalian plant, China
- 1994: "electronic store" opened on CompuServe
- 1995: worldwide sales exceed $13 billion
- 1995: Bought Polish Tire Company Dębica,
- 1998: sold the All American Pipeline and Celeron businesses
- 1999: Announced $1 billion global alliance with Japan's Sumitomo Rubber Industries, which had rights to the Dunlop tire brand in much of the world, to establish six joint ventures in North America, Europe and Japan
- 2000: formed an Internet-based purchasing alliance with five other rubber companies called RubberNetwork.com
- 2003: quarterly dividend to shareholders eliminated
- 2004: Assurance TripleTred and ComforTred tires introduced
- 2005: North American farm tire operations sold to Titan Tire Corporation
- 2006: Goodyear blimp made maiden voyage in China
- 2007: Engineered Products Division sold to Carlyle Group; EPD is renamed Veyance Technologies
- 2008: Voluntary Employees' Beneficiary Association trust (VEBA) approved by U.S. District Court, funded with $1 billion
- 2009: Goodyear Assurance Fuel Max tire introduced in North America
- 2010: plans announced to sell European and Latin American farm tire businesses
- 2011: after being dissolved during WWII, Goodyear and Zeppelin's legacy company partner again to build more airships together
- 2013: New headquarters complex opens in Akron
- 2015: Goodyear and Sumitomo announced that they would dissolve their worldwide partnership.
Corporate structure and leadership
The Goodyear Tire & Rubber Company is structured into the following units:
- Asia Pacific Region
- Ryan Patterson, President
- Europe, Middle East & Africa Business
- Americas Region
- Steve McClellan, President
Board of Directors
Former Board members include James C. Boland and Rodney O'Neal. Richard Kramer is the chief executive officer and president of the company (since 2010), succeeding Robert J. Keegan.
- Douglas Tires
- Dunlop Tyres (North America, Europe, Australia and New Zealand)
- The Kelly Springfield Tire Company (United States)
- Sava (Slovenia)
- Fulda (Germany)
- Dębica (Poland)
- Wingfoot Commercial Tire Systems, LLC
- Bluestreak (Indonesia)
- Regetta (Australia) Distributed by KMART
- LS2000 (Japan) Distributed by Goodyear Autocare
Foreign Relations with Indonesia in the 1960's
Following the military coup in Indonesia in 1965, His Excellency Suharto encouraged Goodyear to return and offered rubber resources and political prisoners as labor. In an NBC special aired in 1967, reporter Ted Yates aired footage showing former Communist rubber union workers escorted at gunpoint to the rubber plantation.
Bad as things are in Indonesia, one positive fact is known. Indonesia has a fabulous potential wealth in natural resources and the New Order [the fascist regime headed by pro-U.S. General Suharto] wants it exploited. So they are returning the private properties expropriated by Sukarno's regime. Goodyear's Sumatran rubber empire is an example. It was seized [by the rubber workers] in retaliation for U.S. aggression in Vietnam in 1965. The rubber workers union was Communist-run, so after the coup many of them were killed or imprisoned. Some of the survivors, you see them here, still work the rubber -- but this time as prisoners, and at gunpoint.
Sexual discrimination lawsuits
Main article: Ledbetter v. Goodyear Tire & Rubber Co.
United StatesSupreme Court JusticeRuth Bader Ginsburg stated,
Lilly Ledbetter was a supervisor at Goodyear Tire and Rubber's plant in Gadsden, Alabama, from 1979 until her retirement in 1998. For most of those years, she worked as an area manager, a position largely occupied by men. Initially, Ledbetter's salary was in line with the salaries of men performing substantially similar work. Over time, however, her pay slipped in comparison to the pay of male area managers with equal or less seniority. By the end of 1997, Ledbetter was the only woman working as an area manager and the pay discrepancy between Ledbetter and her 15 male counterparts was stark: Ledbetter was paid $3,727 per month; the lowest paid male area manager received $4,286 per month, the highest paid, $5,236.
Lilly Ledbetter sued Goodyear claiming she was paid less than men doing the same work. She won the suit and was awarded $360,000, the jury deciding that Goodyear had clearly engaged in discrimination. The case was appealed to the Supreme Court. In Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. ___ (2007), Justice Alito held for the five-justice majority that employers are protected from lawsuits over race or gender pay discrimination if the claims are based on decisions made by the employer 180 days ago or more. The United States Congress overturned this decision by passing the Lilly Ledbetter Fair Pay Act of 2009 which was the first bill signed into law by President Obama.
This was a case of statutory rather than constitutional interpretation. The plaintiff in this case, Lilly Ledbetter, characterized her situation as one where "disparate pay is received during the statutory limitations period, but is the result of intentionally discriminatory pay decisions that occurred outside the limitations period." In rejecting Ledbetter's appeal, the Supreme Court said that "she could have, and should have, sued" when the pay decisions were made, instead of waiting beyond the 180-day statutory charging period.
Justice Ginsburg dissented from the opinion of the Court, joined by Justices Stevens, Souter, and Breyer. She argued against applying the 180-day limit to pay discrimination, because discrimination often occurs in small increments over large periods of time. Furthermore, the pay information of fellow workers is typically confidential and unavailable for comparison. Ginsburg argued that pay discrimination is inherently different from adverse actions, such as termination. Adverse actions are obvious, but small pay discrepancy is often difficult to recognize until more than 180 days of the pay change. Ginsburg argued that the broad remedial purpose of the statute was incompatible with the Court's "cramped" interpretation. Her dissent asserted that the employer had been, "Knowingly carrying past pay discrimination forward" during the 180-day charging period, and therefore could be held liable.
Researchers at the University of Massachusetts Amherst identified Goodyear as the 19th-largest corporate producer of air pollution in the United States, with roughly 4.16 million lbs of toxins released into the air annually. Major pollutants included sulfuric acid, cobalt compounds, and chlorine. The Center for Public Integrity reports the Goodyear has been named as a potentially responsible party in at least 54 of the nation's Superfund toxic waste sites. On February 8, 2008, Goodyear announced the launch of an environmentally friendly tire produced using a cornstarch-based material. The Goodyear Eagle LS2000 partially replaces the traditional carbon black and silica with filler materials derived from corn starch thanks to "BioTRED compounding technology". The new technology increases the tires "flexibility and resistance to energy loss", which extend the tires life-span and lessen the impact on the environment. Similarly, Goodyear announced on April 22, 2008, that it had joined the U.S. Environmental Protection Agency's SmartWay Transport Partnership. The transport partnership is an attempt between the truck transportation industry and the EPA to reduce air pollution and greenhouse emissions as well as increase energy efficiency. The SmartWay partnership's tractors and trailers will use Goodyear's Fuel Max linehaul tires that increase fuel efficiency while reducing emissions. According to Goodyear and EPA officials "the fuel-efficient line-haul tires deliver up to 4% improved truck fuel economy, and when used with other SmartWay-qualified components, each 18- wheel tractor and trailer used in long-haul can produce savings of up to 4,000 gallons per year, or more than $11,000 annually."
Goodyear's plants in Aurangabad and Ballabhgarh, India have received recognition for their excellence in energy conservation, efficiency and management with awards from both state and national governments.
Foreign Corrupt Practices Act charges
On February 24, 2015, Goodyear agreed to pay more than $16 million to settle Foreign Corrupt Practices Act "FCPA" charges that two of its African subsidiaries allegedly paid $3.2 million in bribes that generated $14,122,535 in illicit profits. The U.S. Securities and Exchange Commission "SEC" FCPA charges involved Goodyear subsidiaries in Kenya and Angola for allegedly paying bribes to government and private-sector workers in exchange for sales in each country. According to the SEC because "Goodyear did not prevent or detect these improper payments because it failed to implement adequate FCPA compliance controls at its subsidiaries" and, for the Kenyan subsidiary, "because it failed to conduct adequate due diligence" prior to its acquisition. It was not alleged that Goodyear had any involvement with or knowledge of its subsidiaries' improper conduct.
- Assurance (Passenger All Season)
- TripleTred All Season
- ComforTred Touring
- CS Fuel Max (SUV)
- CS TripleTred All Season (SUV)
- Integrity (OE All Season)
- Fortera (SUV)
- Silent Armor
- Wrangler (truck)
- Silent Armor
- All Terrain Adventure
- HP AW
- MTR with Kevlar
- Radial (235/75R15 only)
- EfficientGrip (Summer Tires)
- EfficientGrip Performance
- EfficientGrip Compact
- Eagle (Touring/Performance/OE)
- Eagle F1
- Eagle F1 Asym SUV
- Eagle F1 Supercar
- Eagle F1 GS-D3
- Eagle F1 Directional 5
- Eagle F1 Asym
- Eagle F1 Asym 2
- Eagle F1 Asym 3
- Eagle Efficient Grip
- Eagle Efficient Grip Performance
- Eagle GT3
- Eagle LS
- Eagle LS2
- Eagle NCT
- Eagle RS-A
- Eagle RS-A 2
- Eagle RV
- Response Edge
- Nordic (Winter tires)
- UltraGrip (Winter tires)
- Commercial Truck
- Cargo G26
- Cargo Marathon
- Cargo Marathon 2
- Cargo Vector
- Cargo Vector 2
- Fuel Max
- Off The Road Tires
- Articulated Dump Truck
- Rigid Haulage Truck
- Mobile Crane
- Port & Container Handling
- Dozer and Loader
- Mine Service
- Motor Grader
- ATV Tires
- Rawhide Camo
- Rawhide MT/R
- RV Tires
- Unisteel series (G670RV, G149RSA, G169RSA, G647RSS, G614RST)
- Wrangler HT (all weather)
- Marathon (trailer towing)
Non-tire industrial (licensed products produced by Veyance Technologies)
- Industrial hose
- Hydraulic products
- Conveyor belt products
- Power transmission products
- Molded transportation products (vibration control)
- Rubber Track
- Isoprene monomer
- Synthetic rubber for medical applications
- Synthetic rubber for chewing gum
Veyance Technologies was purchased by ContiTech and no longer has the rights to Goodyear's licenses.
Goodyear-branded wiper blades are made under license by Saver Automotive, in Ohio. The wipers were never under the Veyance umbrella.
Manufacturing and development facilities
|Location||DOT plant code||Product or activity|
|Akron, Ohio, USA||MB||Global headquarters, North America headquarters, Goodyear Dunlop Tires North America headquarters, innovation center, racing tires, chemicals, tire proving grounds, airship operations|
|Danville, Virginia, USA||MC||Aircraft tires, commercial tires|
|Gadsden, Alabama, USA||MD||Consumer tires|
|Lawton, Oklahoma, USA||M6||Consumer tires|
|Topeka, Kansas, USA||MJ||Commercial tires, OTR tires|
|Hebron, Ohio, USA||P1||Research and development|
|Fayetteville, North Carolina, USA||PJ||Passenger car tires|
|Tyler, Texas, USA||PL||Passenger Car Tires; closed in 2006|
|Tonawanda, New York, USA||DA||Passenger car tires, motorcycle tires|
|Bayport, Texas, USA||Chemicals|
|Beaumont, Texas, USA||Synthetic rubber|
|Houston, Texas, USA||Synthetic rubber|
|Niagara Falls, New York, USA||Chemicals|
|Dębica, Poland||Passenger Car Tires, Truck Tires|
|Statesville, North Carolina, USA||Tire molds|
|Social Circle, Georgia, USA||Tread rubber|
|Napanee, Ontario, Canada||4B||Passenger car tires|
|Medicine Hat, Alberta, Canada||PC||Consumer tires|
|Valencia, Venezuela||PB||Consumer tires, commercial tires|
|São Paulo, Brazil||MX||Latin America headquarters, aircraft tires, aircraft tire retreading|
|Americana, Brazil||Y1||Tire proving grounds, consumer tires, commercial tires, OTR tires|
|Lima, Peru||NT||Consumer tires, commercial tires|
|Philippsburg, Germany||ND||High-performance passenger car tires, winter tires|
|Bangkok, Thailand||NY||Consumer tires, aircraft tires, aircraft retreading|
|Pulandian, China||TC||Consumer tires, commercial tires|
|Santiago, Chile||M7||Consumer tires|
|Cali, Colombia||MY||Commercial tires, OTR tires|
|Amiens, France||NC||Consumer tires|
|Adapazarı, Turkey||CO||Consumer tires|
|İzmit, Turkey||PA||Commercial tires|
|Luxembourg, Luxembourg||KM||Goodyear Innovation center Luxembourg (GIC*L), regional calendering center, commercial tires, OTR tires, tire proving grounds, tire molds, tire plant|
|Uitenhage, South Africa||NW||Consumer tires, commercial tires, agricultural tires, OTR tires|
|Wolverhampton, England||NB||Mixing center, retreading – This site has now begun to cease operations and will be completely closed by 2017.|
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Case Title: “Goodyear: The Aquatred Launch”
Authors: John A. Quelch and Bruce Isaacson
• How can Goodyear be more competitive and maintain its leader position?
• How to launch Aquatred effectively?
Factors that should be taken into consideration:
• Intense competition
Although Goodyear was the leader in U.S. passenger tire market with 15% market share, the company still had to be very careful in all things done because the competition was so intense. There were so many players in the industry, both branded and private label. Although, each of them had less than 10% of market share, the second in rank, Michelin, was growing very fast in both replacement and OEM market. Also, the private label had become the biggest threat for all branded tires since many branded tire owners intended to replace their tires with private label.
• Changes in consumer preferences
From Goodyear’s research, 45% of tire buyers thought that price was the most important factor when shopping for tires, followed by 33% for the outlets and 22% for the brand. Also, Goodyear segmented consumers into four categories: price-constrained buyers (22%), commodity buyers (37%), value-oriented buyers (18%), and quality buyers (23%). Recently, more and more buyers became commodity buyers. When Goodyear launched a survey asked what brand of tires the owners intended to buy the next time, Goodyear had the highest percentage among price-constrained buyers (16%) and commodity buyers (10%), while 24% of value-oriented buyers and 22% of quality buyers intended to buy Michelin tires. This meant that Michelin’s consumers had high loyalty to the brand more than Goodyear’s.
• Goodyear distribution channels
There were three main distribution channels of Goodyear: 4,400 independent dealers accounted for 50% of sales revenues, 1,047 manufacturer-owned outlets generated 27% of sales, and the 600 franchised dealers accounted for another 8% of sales. Comparing to the industry’s statistics that had six main channels of retail sales: garages/service stations (6%), warehouse clubs (6%), mass merchandisers (12%), manufacturer-owned outlets (9%), small independent tire dealers (40%), and large independent tire chains (23%), Goodyear might have too few channels of distribution. The company could lose lots of tire customers who their preferred outlets had no Goodyear tires. Although Goodyear claimed not to want its tires sold in low-priced outlets, they sporadically obtained Goodyear tires. Therefore, Goodyear should answer itself first why it didn’t want its tires sold in low-priced outlets? Bad image? Then why Michelin, which had its tires sold in low-priced outlets, still got higher percentage from value-oriented buyers and quality buyers in the survey of ‘what brand of tires the owners intended to buy the next time’?
• New product launched: Aquatred
Aquatred was a new tire providing improved driving traction under wet conditions. The question was ‘was it the right product for the dealers and for the consumer, as the industry seemed to be turning toward long-life warranties and low-cost private label?’
It was also planned to launch during the Winter Olympics in January of 1992. However, the initial inventory of Aquatreds had been made to fit only domestic cars and molds to produce other sizes would not be available until several months after the Olympics.
In addition, Goodyear hoped to price the Aquatred at a 10% premium over the existing most-expensive tire. However, as the company research stated that more customers were price-sensitive, the company doubted whether the customers would be interested in Aquatred.
• To be competitive in the intense competition, the company needed to figure its core competencies out and differentiate itself from the competitors. As tire was the commodity product, the product itself was difficult to differentiate. Therefore, the company should emphasize on other aspects, for example, strong brand image, and outstanding customer services.
• One solution that can be used to make customers loyal to the brand was implementing customer relationship management or CRM. It was the system used to establish and retain long-term relationship with the customers.
The pros of CRM
o Standardize – All departments that had to deal with customers would have real-time and same format of database to serve all customers.
o Quicker – As the information was real-time, the company could provide faster cross-function services to the customers.
o Know what they want – The customers’ database would show previous purchasing data and the preferences of all customers, which the company could use to forecast the trends and serve what customers really want.
The cons of CRM
o Costly – CRM software was in high price, and there were also some hidden costs, for example, training session.
o Resistance – Most people didn’t like change, some people might even resist. The company had to give time for employees to adapt themselves with new things.
• As it seemed that Goodyear had too few channels of distribution, the company should find more and new ones. From the fact that Michelin sold its tires in low-priced outlets and wasn’t perceived as low-price tires, Goodyear might also be able to do it if the company had right pricing strategy. The distribution channels that Goodyear never used were garages/service stations, warehouse clubs, mass merchandisers, and large independent tire chains. Firstly, Goodyear should evaluate which channel would be suitable for the company, and then test with one outlet from each channel that the company selected for three months. Then, redo the evaluation to make the final decision about which channel should Goodyear expand into.
• Aquatred was the right product for Goodyear. Most people perceived tire as commodity product for long because no player came out with very innovative product. Aquatred could gain first mover advantage as it was very innovative one. Also, from Goodyear’s survey, the second most important tire attributes was wet traction. Therefore, Aquatred would get attention from many customers who concern about tire’s quality.
Aquatred should be launched as soon as possible. It’s innovative product, which could gain highest profitability only when being the first mover. For the problem of unavailable sizes of Aquatred for imported cars if it launched during the Winter Olympics, the company could solve this problem by let those customers make a reservation for unavailable sizes of Aquatred and give them special promotion for that.
Although price was an important factor to be considered when customers wanted to purchase tire, there were still customers who concerned about quality more than price. Aquatred should focus more on quality buyers and value-oriented buyers. In addition, Goodyear could acknowledge the customers that Aquatred was only $8.2 – 8.5 more expensive than the existing most-expensive tire.
• As Goodyear was the market leader, being innovative and doing lots of researches to observe the trends and changing in consumer preferences were the right things.
• As it was estimated that 75% of all Goodyear tires sold in independent or company-owned outlets were sold on an average discount of 25%, it implied that the company might have too many promotions. Finally, the consumers wouldn’t come to buy Goodyear tires at full price and it could affect company’s image, too.
• Goodyear needed loyalty program to establish and retain relationship with consumers as soon as possible before they switched to other branded tires, like Michelin, or private label tires that had lower price than Goodyear.
• The company should find a way to compromise with independent dealers about competition in the areas, while expand more distribution channels and find more new retail formats, like Just Tires.
• In order to launch Aquatred effectively, Goodyear needed cooperation from every department, especially marketing department. Integrated marketing communication was very important to create awareness of the customers. It should focus on the word “innovation” and “safety under wet conditions”.