Goodyear Tire and Rubber Company

The Goodyear Tire & Rubber Company
Public
Traded as
IndustryManufacturing
FoundedAugust 29, 1898; 121 years ago (1898-08-29)
Akron, Ohio, U.S.
FounderFrank Seiberling
Headquarters
Akron, Ohio
,
U.S.
Area served
Worldwide
Key people
Richard J. Kramer (Chairman, President, and CEO)
ProductsTires
RevenueIncrease US$15.377 billion (2017)
Decrease US$1.221 billion (2017)
Decrease US$346 million (2017)
Total assetsIncrease US$17.064 billion (2017)
Total equityIncrease US$4.603 billion (2017)
Number of employees
~64,000 (December 2017)
SubsidiariesList of subsidiaries
Websitegoodyear.com
Footnotes / references
[1]

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.[2] As of 2017, Goodyear is one of the top four tire manufacturers along with Bridgestone (Japan), Michelin (France) and Continental (Germany).[3]

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.[citation needed]

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.[4] The company is the most successful tire supplier in Formula One history, with more starts, wins, and constructors' championships than any other tire supplier.[5] 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.[6] The company opened a new global headquarters building in Akron in 2013.

History

Goodyear factory buildings and former headquarters complex

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.[7]

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. In the late 1920s to 1940, the company worked with Goodyear to build two Zeppelins in the United States and the Goodyear-Zeppelin Corporation was created to facilitate the relationship. The partnership continued even when Zeppelin was under Nazi control and only ended after World War II began.[8]

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.

Expansion 1926–1970

Paul Litchfield, inventor of the tubeless car tire who promoted the Zeppelin partnership and later became Goodyear president and board chairman.

On August 5, 1927, Goodyear had its initial public offering and was listed on the New York Stock Exchange.[9]

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.[10]

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.[11] 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.[12] 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.[13]

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.[13][14]

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%.[15] Despite heavy criticism at the time, Pilliod invested heavily in new factories and tooling to build the radial tire.[16]

Sam Gibara, who headed Goodyear from 1996 to 2003, has noted that without the action of Pilliod, Goodyear "wouldn't be around today."[16]

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.[17]

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.[18] 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.[19] 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

Airless tire concept

The last major restructuring of the company took place in 1991. Goodyear hired Stanley Gault, former CEO 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.[20]

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.[21]

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.[22]

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.[23] Audit Integrity Inc. and Forbes magazine ranked Goodyear sixth on their list of America's most trustworthy companies.[24] 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.[25]

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.[26]

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.[27][28]

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.[29]

In 2018, Goodyear and Bridgestone announced the creation of TireHub, a joint wholesale distribution network across the United States.[30] At the same time, Goodyear also announced that it was ending its distribution relationship with American Tire Distributors, the largest tire wholesaler in the US.[31]

In 2018, Goodyear was ordered to pay $40.1 million to J. Walter Twidwell, who claimed he developed mesothelioma because of exposure to asbestos. After the trial, Goodyear asked the New York Supreme Court for a new trial. Goodyear attorney James Lynch said Goodyear did not receive proper consideration from the jury. Lynch said that the other side's attorneys engaged in character assassinations against expert witnesses. During closing remarks, the attorneys for Twidwell put up a slide with the heads of Goodyear's expert witnesses pasted onto "insulting caricatures."[32]

In December 2018, Goodyear ceased operations in Venezuela due a lack of materials and rising costs resulting from hyperinflation.[33]

Timeline

Goodyear Tires advertisement, Syracuse Post-Standard, February 26, 1916

Source:[7]

  • 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[9]
  • 1929: Construction of world's largest airship dock started in Akron
  • 1929: Introduction of first-known example of low-pressure tundra tires for aviation, invented by Alvin J. Musselman as Goodyear "Airwheels"[34]
  • 1935: Acquired Kelly-Springfield Tire
  • 1937: First American-made synthetic rubber tire
  • 1940: In December, Goodyear-Zeppelin Corporation dissolved with WWII straining partnership[29]
  • 1942: Awarded contract to build FG-series Corsair naval fighter planes
  • 1944: Tire testing begins near San Angelo, Texas[7]
  • 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[7]
  • 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[29]
  • 2013: New headquarters complex opens in Akron
  • 2015: Goodyear and Sumitomo announced that they would dissolve their worldwide partnership.
  • 2018: The company ranked 187th on the Fortune 500 list of the largest United States companies by revenue marking its 24th year on the list