Goodyear shares stuck in reverse amid ‘forward’ plan

London – Goodyear share price fell sharply with the 7 Aug announcement of second quarter results showing a 52% year-on-year decline in earnings to $159 million (€136 million), on sales 2% lower at $4,465 million.

The share-value of $8.36 at the end of the trading week to 8 Aug represented an almost 20% decline from close-of-trading the day before the results were reported by Mark Stewart, CEO and president.

The decline was despite plant cutbacks & closures and sell-offs of the group’s off-road tire and chemicals businesses and Dunlop brand under the Goodyear Forward plan – as well as expected future gains from US import-tariff policies.

Former Stellantis executive Stewart launched the restructuring programme on taking over the helm at the Akron tire maker in late 2023 – when Goodyear shares were trading at around $13.50, some 40% above current levels.

At that time, Stewart said he would “focus heavily on Goodyear's manufacturing operations and distribution… to enhance capability and our cost effectiveness.”

These activities, he added, would be centred around the ‘Goodyear Forward” plan, with the aim of delivering cost reductions worth $1 billion by the end of 2025.

Commenting on the latest results, Stewart, said: "The second quarter proved challenging in both our consumer and commercial businesses.”

The decline, he explained, was driven by “industry disruption stemming from shifts in global trade - including a surge of low-cost imports across our key markets.”

On an earnings call, CFO Christina Zamarro added: “As we look at industry factors influencing our outlook, we expect that it will take longer for us to achieve our 2025 year end margin and leverage objectives.

“While we continue to expect to exceed the original goals of Goodyear Forward both in terms of cost savings and in gross proceeds from asset sales, the recent disruption related to tariffs and impacts on the global supply chain have overshadowed our success.”

Goodyear's leadership now expects trading conditions to stabilise in the “coming quarters” and opportunities to leverage its US manufacturing footprint.

Second quarter segment operating income, it noted, reflected Goodyear Forward gains of $195 million as well as the 3 Feb sale of the group’s OTR tire business to Yokohama Rubber Co. for $905 million.

Meanwhile, the 7 May sale of the Dunlop brand to Sumitomo Rubber Industries generated gross cash proceeds of $735 million.

Also, a 22 May agreement to sell the majority of the Goodyear Chemical business to Gemspring Capital Management is expected to close in late 2025.

Since its launch, the Goodyear Forward plan has involved a major restructuring of production footprint, particularly in the Europe, Middle East and Africa (EMEA) region.

In Germany, Goodyear announced a rationalisation plan in November 2023 to close its plants in Fulda by 2025 and Fürstenwalde by 2027 with a combined loss of 1,750 jobs.

The Fulda unit had capacity to produce 21,000 units/day of passenter car and light truck tires, while the Fürstenwalde truck & bus tire plant was rated at 10,000 units/day.

Earlier this summer, the US tire maker also unveiled plans to close its 1,000-employee, 10,000 units/day light vehicle and off-road tires manufacturing facility in Kariega, South Africa. 

The tire maker also discontinued operations at its 600-employee tire manufacturing facility in Shah Alam, Malaysia at the end of last year as part the Goodyear Forward plan.

Operational since 1972, the Malaysia facility had capacity to produce 5 million units of passenger car, light truck, agriculture and OTR tires per year.