Significant Losses for Goodyear as Company Attempts Turnaround
Survey Shows Trend Towards Mobile Tyre Fitting
Goodyear Reduces Stake in Sumitomo Rubber
Former Midland Power Chief Honoured by World Tyre Industry
AA Tyre Fit Wins Supply Deal with Avis Rent-A-Car
TIC Tyre Awareness Seminars
BF Goodrich Launch Grip Girls Initiative
Bridgestone Score Highly in German Magazine Tests
BF Goodrich with new Consumer Marketing Campaign

Significant Losses for Goodyear as Company Attempts Turnaround

There is no doubt that fiscal 2002 has been a difficult year for Goodyear and the company's recently announced annual figures make interesting reading. Goodyear's global net loss for 2002 was $1.1 billion, a significant increase on the $203.6 million deficit recorded in 2001. However, Goodyear puts its performance down primarily to results in North America with results elsewhere being positive. Indeed President and CEO Robert J Keegan puts a shine on the results by insisting that the results are the evidence of a turnaround in the company's fortunes.

"The turnaround in six of our seven businesses continued in the fourth quarter," said Keegan. "All four of our international tyre businesses achieved a higher profit margin compared to a year ago, with margins more than doubling in three of those businesses. Our 2002 results, especially in our North American Tire business, are extremely disappointing".

The company's North American Tire's unit volume decreased 8.5% for the 2002 fourth quarter and 7.2% for the year. Closer analysis also reveals that were it not for a 5.5% increase in original equipment sales over the course of the year, the figures would have been even worse. Replacement volume in North America, in fact, fell 12.5% for the year. According to Goodyear, revenues for the year decreased compared to 2001 not only due to reduced volume in the replacement market but also because of fewer tyre units delivered in connection with the 2001 Ford tyre replacement programme and, more worryingly, an "unfavourable product mix".

Since the start of the year Goodyear has carried out a number of actions aimed at achieving an improvement in the Group's fortunes. Firstly, in January the company announced restructuring actions in its corporate headquarters and North American Tire organisations resulting in the elimination of more than 700 jobs, including 350 in Akron. The remaining layoffs were distributed across the corporation's other North American locations.

Secondly, at the start of April, Goodyear completed a comprehensive refinancing and restructuring of its bank credit and accounts receivable facilities. This involved replacing a total of $2.94 billion in financing with $3.3 billion in credit facilities that included a $750 million secured U.S. revolving credit facility due in 2005, a $645 million secured U.S. term facility due in 2005, $650 million of secured European facilities due in 2005 and $1.3 billion of secured asset-based facilities due in 2006. The restructured credit agreements replace facilities that generally had shorter maturities but, with the exception of $763 million in U.S. and Canadian accounts receivable facilities, were unsecured.

Keegan commented on the arrangements by saying "These new agreements will provide Goodyear with additional financial flexibility and liquidity. They give us both the time and the opportunity to turn around our North American Tire business."

Survey Shows Trend Towards Mobile Tyre Fitting

Drivers who have tried mobile tyre fitting overwhelmingly favour it over traditional fast-fit centres in a new survey by AA Tyre Fit. The survey, which covered both fleet and retail customers, showed that 86% said that they would use mobile fitting in preference while just 4% favoured fast-fits. The reasons for this strong vote can also be found in the survey, with 94% describing mobile fitting as more convenient than a normal fast-fit centre and 87% saying that it allowed them to make more efficient use of their time. Location of use of mobile fitting by those questioned in the survey was split almost equally between home, office and roadside.

AA Tyre Fit General Manager, David Goodyear, says: "We have a saying at AA Tyre Fit that once a customer has tried mobile, they never go back to a fast-fit. This survey bears out that adage. We believe that mobile tyre fitting is the future of theindustry and we are investing heavily in it".

AA Tyre Fit launched its mobile fitting fleet last year and now has 50 vans in operation across the UK with a further 60 currently coming into operation. By the end of the year it aims to have 270 mobile units in operation. AA Tyrefit also operates and services the tyre sales function on the Tyres-Online website.

Goodyear Reduces Stake in Sumitomo Rubber

As part of its ongoing plan to enhance the company's financial flexibility, Goodyear has announced that it has reduced its shareholding in Japan's Sumitomo Rubber Industries to around 1.5% by selling 20.83 million shares for approximately $83.4 million. Sumitomo bought 20.33 million of these shares. Goodyear, which acquired a 10 percent ownership of Sumitomo as part of their 1999 global alliance, will take a non-cash charge of approximately $10 million (6 cents per share) related to the transaction in the second quarter. Goodyear said it will use most of the proceeds of the transaction to reduce debt.

Former Midland Power Chief Honoured by World Tyre Industry

The pioneering work of Anne Evans, the American environmentalist who created a trail-blazing waste tyres-to-energy power plant in the West Midlands, has won one of the industry's top honours. Best known in the UK as the founder, and managing director from 1989-1994, of Elm Energy & Recycling (UK), Mrs Evans was presented with the 2003 Tyre & Rubber Industry Pioneer Award at the Tyre Industry Association's World Tyre Exposition in Louisville, Kentucky, USA.

She commented: "I am delighted to receive such an award and would like to think that maybe the work I did in the Midlands had something to do with me receiving the honour. Wolverhampton will always be special to me - not least for the good friends and business contacts I established while involved with the Elm Energy project."

Mrs Evans, an environmental consultant, international tyre trader and scrap tyre project developer, is an established and respected figure in the UK industry. In 1989 on the invitation of the UK government to help alleviate the national problem of scrap tyres, Mrs Evans developed the Elm Energy facility. The £50million waste tyres-to-electricity plant in Wolverhampton became the largest electricity generator fuelled with waste or renewable fuels in Britain's Non-Fossil Fuel Obligation-Renewable Energy Order brought about by the privatisation of the electricity industry and market. It disposed of ten million tyres a year, around 20% of the UK's annual scrap total. In 1994 Elm Energy received the AA's Achievement Award for Environmental Concern and the Foreign Investor of the Year Award from Corporate Relocation magazine.

After leaving the company Mrs Evans remained active in the UK waste tyre collection and processing industry until 2001 as a non executive director of Tyre Collection Services, Birmingham - one of the country's biggest national waste tyre collection specialists. She went on to develop their E+ (Environment Plus) Programme for environmentally sensitive collection and disposal of waste tyres and worked with the UK Tyre Industry Council on developing its Responsible Recyclers Scheme which was adopted by the government to be the industry standard.

Mrs Evans is Chairman of EER Limited in Hebron, Connecticut, USA. EER is an international consulting and project development firm providing environmental and expert witness services to the world scrap tyre industry and to parties appearing in the US courts. She is also Chairman and Chief Executive of TYRES 2000 Limited, a company specialising in the international tyre trade.

AA Tyre Fit Wins Supply Deal with Avis Rent-A-Car

AA Tyre Fit has won a supply deal with vehicle rental giant Avis Rent A Car to cover the whole of the UK. The arrangement will see AA tyre Fit replace all damaged and worn tyres on Avis's rental fleet using mobile units, many through the new AA tyre Fit mobile fleet operated from its Coventry headquarters.

TIC Tyre Awareness Seminars

The 2003 TIC tyre Awareness Seminar Programme began in Scotland this year with two high profile presentations at the Dean Park Hotel, Renfrew on the outskirts of Glasgow. The first took place in front of an audience of thirty road safety officers from the west of Scotland, who spent the day learning about the intricacies of passenger car tyres. The presentation was made by Keith Thompson from "Training for Advancement", a Kwik-Fit associated company.

The successful presentation to road safety officers was followed two weeks later at the same venue by an equally fruitful presentation to West of Scotland trading standards officers. Both events emphasised the fact that the seminar programme has clear value in highlighting the importance of tyre safety to audiences, who would not routinely consider the subject to be of prime consideration in their day to day activities. All delegates commented on their change of attitude to the subject and the realisation of its importance in road safety. Further seminar events will take place later this year in England.

BF Goodrich Launch Grip Girls Initiative

BF Goodrich is set to bring an added touch of glamour to UK tyre dealerships with the introduction of its "Grip Girls" merchandise initiative. The programme will see a team of 35 girls visiting over 140 tyre dealerships around the country over a four month period where they will distribute a BF Goodrich Tires brand pack containing product information relevant to each depot as well as BF Goodrich Tires design led point of sale material.

Bridgestone Score Highly in German Magazine Tests

Bridgestone Europe have not been slow to point out that they have achieved high rankings in comparative tests conducted recently by leading German motoring magazines on summer tyres. In the April issue of the tuning-oriented 'Auto Bild Test & Tuning', the new ultra-high-performance Bridgestone Potenza RE050 outstripped five other brands to emerge as 'best of test'. The 225/40 R 18 tyres, fitted to a Ford Mondeo 2.5 V6, were put through their paces under wet and dry conditions. Awarding its 'Auto Bild recommendation', the publication noted that the RE050 offers outstanding performance in wet tests, best braking on dry surfaces, excellent lateral grip and good all-round driving characteristics.

Meanwhile, the March 2003 issue of the authoritative 'ADAC motorwelt', published by Germany's official automobile association, rated the Bridgestone ER 70 top of a 16-tyre line-up in the 185/60 R 14 H category. Trials were conducted using a VW Polo 1.4 - with dry performance measured at the Nürburgring; and wet handling, comfort noise and rolling resistance evaluated at the Contidrom test track near Hannover. ADAC defined the ER 70 as 'very recommendable', citing well balanced results on both dry and wet surfaces. It also classed the Firestone Firehawk TZ 200 as 'recommendable' in this size, with top marks awarded for its low outside noise. The ADAC tests are carried out on tyres purchased anonymously from dealers, and are widely recognised as the benchmark for Europe. Their results are reproduced in associated journals in Austria and Switzerland, and are frequently quoted elsewhere in European automotive and consumer protection media.

Two other highly prestigious publications, ' Auto, Motor und Sport' and 'Auto Bild', also tested some Bridgestone Ultra High Performance tyres. On 5 March 2003, Auto, Motor und Sport lauded the Bridgestone Potenza S-03 as yet another 'best of test' in a five-brand comparison of 205/55 R 16 W models. Running on an Audi A4 3.0, the Bridgestone was considered to offer good all-round driving characteristics, with good braking, steering precision, wet grip and hydroplaning resistance. In Auto-Bild (7 March 2003), the Bridgestone RE 720 205/55 R 16 V headed a list of 11 summer tyre brands and was deemed to be 'very recommendable'. The editorial report listed its advantages as 'excellent handling characteristics in the wet, very good lateral grip and best braking on dry surfaces'.

BF Goodrich with new Consumer Marketing Campaign

BF Goodrich have announced the launch of a new consumer marketing campaign for the next 12 months aimed at increasing demand for its range among its key target audience of 18-35 year old males. The campaign sees the brand renewing its links with Vicki Butler-Henderson in a series of sponsored columns headed up by the television presenter across the regional press. The columns are set to cover a whole host of topics related to driving on Britain's roads including drivers' frustrations and choice of vehicles.

The second tier includes a link up with the Mirror newspaper in its Mirror Mania football pull out section every Monday. through the deal BF Goodrich Tires will further enhance its grip credentials with the sponsorship of a "Get a Grip" column where a football personality that has literally "lost his grip" on the previous Saturday will be named and shamed.

Mark Hopkins, Brand Manager BF Goodrich Tires UK and Ireland comments: "In 2003 we will be working hard on driving demand for the brand through the consumer media, which will in turn drive sales for our customers. the different strands we are working on are specifically aimed at our target audience and will capture the brand essence of grip and exhilaration. We know through our research that the media we are working with are spot on in terms of profile and credibility".