- Goodyear CEO and Chair Richard Kramer will retire in 2024, the automotive supplier said Wednesday.
- The company did not name a successor. It hired an executive search firm to find a replacement.
- Kramer’s retirement comes as Goodyear overhauls its corporate strategy to try to return the company to profitability. The tiremaker lost $89 million in the third quarter and $398 million during the first nine months of the year.
The supplier said it plans to transform its business following an evaluation by its review committee. Goodyear aims to double the operating margin of its tire business from an estimated 5% in 2023 to 10% by the end of 2025.
“The Review Committee explored all value maximizing opportunities and identified specific, detailed initiatives to streamline our portfolio, expand margins and fortify our balance sheet, and do so with expediency,” Kramer said in a news release. “Building on our strengths, this plan will enable Goodyear to enhance and expand our leadership position, deliver profitable growth across markets, create significant value for our shareholders and – ultimately – lay the foundation for success for the next 125 years.”
Goodyear’s transformation plan includes a strategic review of its Dunlop brand, as well as its chemical and off-road tire businesses. It hopes to raise more than $2 billion in gross proceeds.
The company plans to boost its annual run rate by $1.3 billion by the end of 2025. Goodyear said it would save $1 billion by streamlining its retail, manufacturing, purchasing, supply chain, and research and development operations, as well as reducing costs related to sales and overhead. Examples include increasing product standardization, as well as substituting and consolidating materials.
It also plans to improve margins by $300 million by raising prices, reducing product offerings, fixing or exiting low-margin product lines and selling more premium products.
The company said it wants to better differentiate its tire brands, with Goodyear as its premium offering and Cooper as its mid-tier product line.