April 4, 2011
The Goodyear Tire & Rubber Company said at an investor press conference that it is targeting 2013 segment operating income in its North American Tire unit of $450 million and improved segment operating income in its international businesses. In total, Goodyear is targeting record segment operating income of $1.6 billion in 2013.
“Having momentum coming out of the deep economic recession, we are now positioned to confidently drive higher levels of performance across our businesses,” said Chairman and Chief Executive Officer Richard J. Kramer.
“We see the tire industry being guided by seven MegaTrends over the next five to ten years. We believe these trends favor Goodyear and our well-established innovation capability,” he added.
“We have a clear view of our destination as a business and well-defined strategies for driving value going forward. Our focus will be winning in the segments where the highest profits are available for Goodyear and for our customers.”
Going forward, the company anticipates making capital investments of between $1.1 billion and $1.3 billion per year in 2012 and 2013, up slightly from an expected $1.1 billion to $1.2 billion in 2011. Between $500 million and $600 million each year will be focused on profitable growth opportunities through plant modernizations, expansions, and new construction. These investments will support a 3 to 5 percent annual increase in unit volume, focused on high-value-added tires in high-margin segments.
Goodyear expects to reduce its underfunded pension obligations to $1.2 billion — or by more than half — by 2013. It expects to make pension contributions of $550 million in 2012 and $525 million in 2013, in addition to contributions of approximately $275 million in 2011. As a result of these planned actions, the company’s pension expense is expected to decrease by $100 million a year by 2013.
The company held a Webcast of its investor meeting on March 22 in New York. A replay of the meeting is available on Goodyear’s investor relations Web site at http://investor.goodyear.com.
Approximately 30 minutes prior to the start of the meeting, the company will post financial and other related information that will be presented on the Web site.