Akron, Ohio – Goodyear Tire & Rubber Co. has signalled a possible 'return to business' in May, as it expects OE vehicle manufacturers to restart operations across the US.
The company expects to ramp up production at its idled factories once manufacturing starts at some of the major auto makers, many of whom are targeting first week of May for resuming operations.
"Ideally in early May, if we're optimists, we'll see some production line up, and that will be a good sign," Goodyear chairman, president and CEO Rich Kramer said in an exclusive interview with Tire Business, a US sister publication of European Rubber Journal.
"It won't happen on 1 May, but as it ramps up and the supply chain for us and for the auto suppliers comes into place, you could see us getting back to some more activity, which ultimately is needed."
The Akron-based tire maker announced 2 April that all of its tire and retread manufacturing plants in North America, Europe, the Middle East and Africa regions were going to remain idled "until further notice" in the wake of the Covid-19 pandemic.
Goodyear's commercial tire service business, like other commercial dealerships, is considered an "essential" business and the company is keeping its truck-care network open to support the trucking industry.
"We'll follow the demand signal that the OEMs gives us and that the markets at large give us," Mr. Kramer said.
However, he cautioned that when that time finally arrives, and manufacturing around the world resumes, society will have to make "trade-offs" for the betterment of the economy.
"We can't stay sheltered forever," Kramer said. "I believe we should be sheltered now, so don't misunderstand me. But we can't do it forever. At some point down the road, we are going to have to make trade-offs on how we deal with this to get the economy back up and running."
Supply remains strong
According to Kramer, supply does not seem to be an issue, at least in the short-term, particularly with commercial tires, which services an "essential" industry.
"We're selling tires to keep trucks moving, keep medicine moving, keep food moving, keep America rolling, as we say," Kramer said.
"That is the priority for us, so we'll see where the inventories are and the demand signals are to see when we open for that as well."
Commenting on the Covid-19 pandemic, Kramer said it was unlike anything he has witnessed previously.
"It is not just unprecedented, but unprecedented in the speed and ferocity in which it has spread."
That's what makes it so different, he said.
"Add to that a lack of clarity around it, in terms of depth and duration of what Covid has done and continues to do, (that) adds to the disruption that we are all having to deal with."
The "demand shock," as he calls it, has hit the tire industry where it hurts most: Its bottom line.
According to Kramer, analysts predict OE business will fall 20% and the replacement business will decrease 15%, equal to or worse than numbers during the Great Recession.