Keegan: Goodyear 'well positioned' for success in '08

Tire Business staff report

Akron, Ohio -- With debt and legacy obligations expected to fall about $2000 million this year, Goodyear is “well positioned” for a successful 2008, Chairman and CEO Robert Keegan told shareholders yesterday at the company's annual meeting.

Keegan said the company expects to see its debt and legacy obligations drop to $6000 million this year, down from around $8000 million last year and half of what they were at year-end 2006.

The company has also been heavily involved in premium segments of the tyre market, which Mr. Keegan said have “relatively inelastic pricing dynamics.” Additionally, Goodyear has made changes in its fixed cost structure through reductions in high-cost global capacity and plant closures, further improving the company's financial position.

“We remain diligent in our planning relative to economic conditions,” Mr. Keegan said in his planned remarks. “However, the improvements we have made in our go-to-market model, in our cost structure and in our balance sheet give me confidence that Goodyear is well positioned to continue to progress.”

Mr. Keegan mentioned other highlights from 2007, including an 8-percent increase in revenue per tyre as a result of changes in pricing and product mixes, a strike-adjusted 24-percent increase in total segment operating income and strong growth in emerging foreign markets.

Looking forward, Mr. Keegan said Goodyear is committed to achieving financial goals it set for itself two and half years ago: 8-percent segment operating income return on sales globally, 5-percent segment operating income return on sales in North America and a debt-to-EBITDA ratio of 2.5.

From Tire Business (A Crain publication)