Free Cash Flow Outlook
Q: What's driving the free cash flow usage and outlook?
A: Christina explained that the free cash flow was a use of $340 million in the quarter, driven by higher rationalization payments and increased working capital use. They expect strong free cash flow in the fourth quarter and next year, driven by recovery of working capital outflows and reducing CapEx below $1 billion, contributing to significant cash generation in 2025. "

CapEx Reduction
Q: Why is next year's CapEx expected to be below $1 billion?
A: Christina stated that as part of Goodyear Forward, they are challenging capital allocation assumptions and reducing CapEx to generate strong free cash flow. This includes reassessing standards and processes to ensure best cost outcomes, leading to a CapEx reduction of about $300 million year-over-year. "

Volume Declines and Market Share
Q: Is the volume decline indicative of a market share shift?
A: Mark explained that there has been an influx in the Tier 4 market with Asian tires. Goodyear intentionally exited low-margin business as part of Goodyear Forward, resulting in volume declines. Christina added that sell-in is outperforming sell-out, possibly due to distributors overstocking low-end products ahead of potential tariffs. They are focusing on growing in higher rim sizes (greater than 18-inch) to capture premium market share. "

Margin Improvement Strategies
Q: How are you addressing margin targets amid headwinds?
A: Mark highlighted that Goodyear Forward is key to improving margins, focusing on operational efficiencies like reducing scrap and enhancing plant effectiveness. They are concentrating on higher rim sizes (18-inch and above) and premium segments, with a clear roadmap over the next 24 months to improve margins. "

Asset Dispositions
Q: What's the update on the asset dispositions process?
A: Christina mentioned they are progressing as expected with the two other planned dispositions, aiming to achieve the right value for shareholders. They are confident in meeting their objectives and are prioritizing shareholder value over rapid completion. "

Leverage Target
Q: Why target a net leverage of 2x to 2.5x by end of 2025?
A: Christina explained that interest rates and access to capital drive their goal toward a more investment-grade credit rating. They aim for a balance sheet comparable to competitors, many of whom are less than 2x leveraged, to improve interest coverage costs and competitiveness. "

Distribution Strategy and ATD Exposure
Q: What's the impact of ATD's bankruptcy on Goodyear?
A: Christina stated that their receivable with ATD is about $135 million, but they have reached an agreement regarding payment of pre-petition claims and do not see a material impact. Mark added that the situation validates their strategy of forming TireHub, and they continue to focus on their distribution value propositions. "

Inventory Levels
Q: Are inventories normalizing in the system?
A: Mark noted that EMEA's channel inventory is about 10% lower than last year, with winter inventories 15% lower. In the U.S., channel inventory is heavy with low-end tiers due to potential pre-buying, but overall, Goodyear's inventory levels are healthy, and they are focusing on premium products. "

Price/Mix Outlook
Q: What's driving the negative price/mix in Q4 and outlook for next year?
A: Mark explained that pricing dynamics involve many factors beyond raw materials. Christina added that about 30% of their business is covered through OEM RMI contracts, and they expect commodity prices to normalize as pre-buying stabilizes. They continue to price competitively while focusing on cost structures. "

Company-Owned Retail Stores
Q: What's the progress and outlook for company-owned stores?
A: Mark emphasized improvements in customer service and leveraging stores for fleet services, with 600–700 fleet appointments per day. They see strong growth opportunities and consider the retail stores a key part of their long-term strategic growth, currently best placed within the company. "

SKU Expansion and High Rim Sizes
Q: How much room is there for growth in 18-inch and above tires?
A: Christina mentioned that in North America, 57% of Goodyear branded products are greater than 18-inch, but across the full portfolio (including Cooper), it's only 46%, indicating significant room for growth. They plan to expand in this segment. "

Dunlop Asset Sale
Q: What's the status and outlook for the Dunlop business?
A: Christina confirmed that Dunlop is about 5 million units, mostly in EMEA, and revenue is expected to increase due to volume growth. Margins remain healthy as they have repositioned Dunlop into the Tier 2 space, focusing on strategic brand positioning while undergoing a strategic review for divestiture. "