Asia Pacific Goodyear
Network Workshop
August 8 – 9, 2005 , Manila
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1. History of Goodyear
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1898 founded by Frank & Charles Seiberling in Akron, Ohio, USA
named after Charles Goodyear (inventor of the vulcanisation process)
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1916 world‘s largest tire maker
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20thies expanded amongst others into Australia and Indonesia (Dutch East Indies) and
established its own rubber plantations in Sumatra
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1935 aquired tire maker KELLY-SPRINGFIELD
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1937 began producing tires made from synthetic rubber
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1962 first polyester tire cord
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1967 biasbelted tire
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1986 thwarthed takeover attempt by a British financier, Goodyear had to sell the nontire businesses and borrow a lot of money
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History of Goodyear
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1990 first money-losing year since the Depression.
Lay-offs and plant closures followed.
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1996 acquired Polish tire maker T C DEBICA and a 60% stake of South African tire
maker CONTRED.
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1997 formed an alliance with Japanese SUMITOMO RUBBER INDUSTRIES
(Joint-Venture)
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1999 acquired SUMITOMO RUBBER INDUSTRIES‘ North America and
European DUNLOP TIRE businesses.
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2000 10% of the workforce were dismissed and other cost-cutting efforts were used to
solve severe finance problems
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2003 once owned 10% of SUMITOMO RUBBER INDUSTRIES, Goodyear sold back
most of the shares, now owns only 1% SUMITOMO
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2. Current Figures
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#3 tire maker in the world, behind Bridgestone and Michelin
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Products: tires, automotive hoses, belts and industrial chemicals.
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90 plants worldwide; 47 of them are tire plants and 42 of these are unionised
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Rubber plantations in Indonesia
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Record sales in 2004:
Sales:
Sales Growth:
Net income:
Employees:
Employee Gr.:
18,370 mil.$ (54% outside the US included 7% from Asia Pacific)
21.5 %
114.8 mil. $
84,000
2.3 %
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3. The Seven Strategic Drivers
1.
Outstanding leadership
2.
A lower cost structure
3.
Cash is king intensity
4.
A fully leveraged distribution network
5.
Enhanced brand strength
6.
Product leadership
7.
Advantaged supply chain
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4. Analysis of Goodyear
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Strengths
Goodyear and Dunlop brands are well recognized all over the world
5700 patents issued or granted around the world.
Presence in most countries of the world, even the major world markets
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Weakness
Net losses in the past (2000-2003)
Decline in Western Europe OE tire market
Poor Cash flows in the past
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Opportunities
Tie-up on the American OE tire market (e.g. VOLVO and MACK Truck)
New Products (e.g. ASSURANCE tire family)
The rapidly growing tire market in Eastern Europe
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Threats
Weak North American tire market
26 Litigation (e.g. Entran II)
Increasing raw material costs: natural rubber +36%
crude oil
+25%
based on the figures of 2003!
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5. Shortage of natural rubber
Source: Rubber & Plastic News, July 11, 2005
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Shortage of natural rubber
1.
In the past: decrease of natural rubber prices –
2.
INTERNATIONAL TRIPARTITE RUBBER ORGANISATION (ITRO), August 2002
was founded
3.
ITRO-member states: Thailand, Malaysia and Indonesia
(70% of the world NR production)
4.
The tire industry consume more than 70% of the natural rubber production
5.
Great increase of natural rubber prices from 2003 to 2004;
between 16% and 20%
6.
Demand on rubber is increasing stronger than the production
7.
In 2010 the demand will be at 9.6 mil metric tons – 300,000 tons more than it will be
produced. This problem will not end before 2020 (forecast IRSG).
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Shortage of natural rubber
What are the solutions of the companies?
Bridgestone/Firestone owns the world largest rubber plantation in Liberia. It produces
only a small percentage of BFS needs.
Goodyear reduces the part of NR about 8% in the tire without losing performance.
The Colorado States University and the Ohio States University are working on
genetically engineering of Rubber trees to produce more and better Latex.
Research on SR to substitue NR
Using nanotechnology to get the same performance with less NR and to produce
leighter tires
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6. Run-Flat Tires
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The future of the tire making industry !
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Goodyear named their run-flat tire EMT (= Extended Mobility Tire)
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You can drive without air in the tire between 80 and 200 km by normal
highway speed.
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No need to change the tire in dark, suspicious and hazardous areas
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No need for a spare wheel;
cars getting lighter and need less fuel
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7. Goodyear in Asia Pacific
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Country
Australia
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China
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India
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Indonesia
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Japan
Malaysia
New Zealand
Philippines
Singapore
Taiwan
Thailand
Location
Bayswater
Melbourne
Sommerton
Dalian
Qindao
Aurangabad
Ballabgarh
Aek Tarum Estate
Bogor
Dolok Merangir Estate
Tatsuno
Kuala Lumpur
Upper Hut
Las Pinas
Singapore
Taipei
Bangkok
Products
Conveyor belts
Aero retread
Tires (50:50 jv)
Tires
Hose products
Tires
Tires
Rubber plantation
Tires
Rubber plantation
Tires
Tires
Tires (50:50 jv)
Tires
NR purchasing, R&D
Tires
Tires
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Goodyear in Asia Pacific
Importent developments in the region
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Since 97 the tire imports into the US have raised to double and the jobs have declined
more than 21%. The main reason for that is the tire exports out of China
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High increasing rate of population in Asia and the rise of living standards in main
countries, like China, India or Pakistan will push the demand on tires from the
consumers side.
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Goodyear forecast: car sales in China will rise by 12 % this year
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Goodyear invest 18 mil$ in its Dalian (China) plant to produce run-flat tires
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Goodyear purchase now 1% of its need in China it will increase to 10% by 2010
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30% of the Goodyear-Dalian production goes into the export / Agreement with the USW
accept this as long as US plants are operating at a „significantly full level“.
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In some years Dalian plant will only produce for the domestic market.
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8. Goodyear engaged in Union-Busting in Thailand
ICEM calls for reinstatement of fired PCFT branch chairman
The ICEM is sharply critical of labour practices being carried out by
Goodyear Thailand Ltd.. Local management at the 600-worker factory in
Bangkok has systematically denied basic trade union rights to members
and officers of ICEM affiliate Petroleum and Chemical Workers'
Federation of Thailand (PCFT).
In March, managers fired the chairman of the Goodyear Thailand branch
of the PCFT, Anan Pol-ung, for merely carrying out his lawful
responsibilities in attempting to achieve social benefits for workers in the
factory's rubber stock division.
In a letter to Goodyear‘s Thai management, ICEM General Secretary
Fred Higgs said, „Preventing a trade union leader‘s right to recruit and
organise in the workplace is a gross violation of international standards
on labour and human rights. We intend to take this injustice and ensure
that Goodyear is linked to a serious labour human rights infraction
throughout the world.“
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