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    Goodyear Tire & Rubber Co (GT)

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    Business Description

    The Goodyear Tire & Rubber Company (Goodyear) is a global leader in tire manufacturing, distribution, and sales. The company produces a wide range of tires for various applications, including automobiles, trucks, aircraft, and industrial equipment, and also provides related services such as retreading and automotive maintenance. Goodyear operates through three regional segments: Americas, Europe, Middle East and Africa (EMEA), and Asia Pacific, with a strong presence in both original equipment and replacement tire markets.

    1. Tires - Manufactures and sells tires for automobiles, trucks, buses, motorcycles, aircraft, and industrial equipment. Includes consumer tires, commercial tires, and specialty tires for off-the-road (OTR) vehicles, mining, and aviation.

      • Consumer Tires - Designed for passenger vehicles, motorcycles, and light trucks.
      • Commercial Tires - Built for trucks, buses, and heavy-duty vehicles.
      • Specialty Tires - Developed for aircraft, mining, and industrial applications.

    2. Other Tire-Related Sales - Offers retreaded tires, tread rubber, and materials for tire retreading. Includes specialty products such as aviation and race tires.

    3. Retail Services and Service-Related Sales - Provides automotive maintenance and repair services through company-owned retail outlets, catering to both consumer and commercial customers.

    4. Chemical Sales - Produces and sells synthetic rubber and other chemicals to third-party customers, contributing a smaller portion of overall sales.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Mark W. StewartChief Executive Officer and PresidentJanuary 29, 2024Appointed as CEO and President in 2024. Previously served as COO of North America at Stellantis N.V. (2018–2024).
    Darren R. WellsExecutive Vice President and Chief Administrative OfficerJanuary 1, 2023Nearly 20 years of service at GT. Previously CFO (2018–2022). Set to retire on February 29, 2024.
    Christina L. ZamarroExecutive Vice President and Chief Financial OfficerN/AOversees GT's financial operations, including reporting, controls, and strategic planning.
    Stephen R. McClellanPresident, AmericasJanuary 2016Responsible for GT's operations in North, Central, and South America. Joined GT in 1988. Set to retire on April 1, 2024.
    Christopher R. DelaneyPresident, Europe, Middle East, and AfricaSeptember 2017Oversees GT's operations in Europe, the Middle East, and Africa. Joined GT in 2015.
    Nathaniel MadarangPresident, Asia PacificMarch 2021Responsible for GT's operations in Asia, Australia, New Zealand, and the Western Pacific. Joined GT in 2008.
    Laura P. DudaSenior Vice President and Chief Communications OfficerJanuary 2019Leads GT's global communications activities. Joined GT in 2016.
    Christopher P. HelselSenior Vice President, Global Operations and Chief Technology OfficerMarch 2021Oversees GT's global operations and R&D. Joined GT in 1996 and has held various leadership roles.
    David E. PhillipsSenior Vice President and General CounselJune 2019Chief legal officer at GT. Joined GT in 2011 and previously served as Associate General Counsel, Americas (2016–2019). Currently 48 years old.
    Gary S. VanderLindSenior Vice President and Chief Human Resources OfficerFebruary 2019Leads GT's global HR activities. Joined GT in 1985 and previously served as VP, HR - Americas (2016–2019).
    Margaret V. SnyderVice President and ControllerMarch 31, 2023Principal accounting officer at GT. Joined GT in 2020. Previously held roles such as Director of Corporate Accounting and Financial Reporting (2020–2022) and Controller for Latin America (2022–2023).

    Questions to Ask Management

    1. Despite the ongoing Goodyear Forward initiatives, your consumer replacement volumes have been declining significantly, with an average 9% drop over the last nine quarters in North America. Can you explain how much of this decline is due to intentional volume loss versus market share loss, and when do you expect volumes to stabilize or improve?

    2. You've set a net leverage target of 2x to 2.5x by the end of 2025, which is lower than your historical levels and many high-yield companies. What is the rationale behind committing to such a low leverage ratio, and how does this align with your capital allocation and investment strategies?

    3. The Goodyear Forward program aims for $500 million in annualized savings from footprint and plant optimization by 2025. Could you provide specific details on the plant rationalizations and optimization strategies you're implementing to achieve these savings, and how they might impact your production capacity and workforce?

    4. Given the significant influx of low-end imports in the U.S. and Europe impacting your replacement tire volumes and market share, what concrete steps are you taking to combat this competitive pressure, and how do you plan to regain share without sacrificing profitability?

    5. With the planned divestitures, including the sale of the OTR business and the potential sale of the Dunlop brand, how are you balancing the objectives of maximizing proceeds, finding the right strategic fit, and adhering to your timeline? Additionally, how will these asset sales affect your long-term growth and profitability targets?