Darren Wells, Goodyear’s executive vice president and CFO, told attendees at yesterday’s JP Morgan High Yield Conference that Goodyear is responding to the financial downturn with additional cost savings moves and inventory reductions.
“It is widely known that the economic slowdown is having a considerable impact on consumer demand and industry volume,” Darren Wells, Goodyear’s executive vice president and CFO. “Fourth quarter industry volumes were well below expected levels, prompting a significant increase to our production cuts that now extend across all business units.”
Wells indicated that Goodyear would announce additional cost reduction moves during its February 18th conference call with analysts, which follows the release of its 2008 financial report.
“Goodyear’s raw material costs were approximately 13 per cent higher in 2008 than in 2007, with much of this increase coming in the fourth quarter, which was up more than 25 per cent. We anticipate raw material cost increases to peak in the first quarter before beginning to moderate in the second quarter.”
Goodyear estimated that 2008 North American consumer replacement shipments were down some 3.5 per cent versus 2007, with the passenger car/light truck OE market down 22 per cent year over year. On the commercial tire side, Goodyear said replacement shipments were down 11 per cent and OE shipments were down about 18.5 per cent.