A Goodyear blimp flies
Goodyear
AKRON, Ohio — Does the Goodyear blimp promote tires?
That was one query veteran auto government Mark Stewart had when he began as CEO of Goodyear Tire & Rubber Co. a bit greater than a 12 months in the past, looking for to guide a change plan for the quintessential American firm.
For a century, Goodyear Tire has used greater than 300 helium-filled airships to tout its model. Stewart wished to make sure customers related the blimps to the corporate’s services, which it has increasingly done as Goodyear celebrates the 100-year anniversary of its first blimp, called Pilgrim, in 1925.
“The reply is sure it could, and sure it does,” Stewart advised CNBC throughout an interview on the firm’s headquarters. “It truly is about utilizing one among our strongest advertising icon items, the blimp, each right here in addition to in Europe, to in truth promote tires.”
The blimp query was a simple one to reply in contrast with the remainder of the challenges Stewart, who has grow to be identified for transformation plans, has tackled since becoming a member of the corporate in January 2024.
Goodyear CEO Mark Stewart speaks as Canada’s Prime Minister Justin Trudeau and Ontario Premier Doug Ford look on throughout an announcement on the Goodyear Canada Inc tire manufacturing plant in Napanee, Ontario, Canada August 12, 2024.
Cole Burston | Reuters
Very like automakers and associated suppliers, Goodyear’s enterprise is quickly altering with new applied sciences, elevated competitors from low-cost international locations such as China and investor skepticism on whether or not a legacy firm can remodel itself to be extra environment friendly, worthwhile and aggressive.
Goodyear’s reply, which was prompted by activist investor Elliott Funding Administration revealing a stake in the company in 2023, is “Goodyear Ahead” — a two-year transformation plan that ends in December.
The plan includes doubling working revenue margin to 10%, enacting top-line and value reductions of $1.5 billion, and bringing in gross proceeds of $2 billion in enterprise asset gross sales. It is also lowering its debt load by $1.5 billion, internet of roughly $1.1 billion for restructuring.
To help, the corporate is investing in and deploying synthetic intelligence applied sciences and 3D-printing for issues similar to tread tooth, in addition to utilizing simulation to hurry growth and manufacturing of its merchandise.
Roughly midway via the preliminary plan, Stewart mentioned Goodyear is forward of schedule for its benchmarks, together with upping the cuts by $200 million. However traders stay skeptical amid geopolitical uncertainty such as tariffs and a disbelief within the longevity, or “stickiness” in tire terminology, of the adjustments.
Pilgrim, Goodyear’s first branded public relations airship, took its first flight June 3, 1925.
Goodyear
Stewart believes Goodyear is at a “present me” interval with traders, which he plans to proceed to ship on as the corporate has reported 5 consecutive quarters of margin progress and its greatest retail efficiency in additional than 20 years.
“We’re persevering with to execute, and I feel we’re doing a greater job of speaking by way of our single and double hit wins as we undergo the Goodyear Ahead, and structurally altering the enterprise,” mentioned Stewart, whose father labored at an Alabama plant for Goodyear’s not too long ago bought Dunlop model. “It is persevering with to stack these up.”
Shares of Goodyear obtained a 17% increase after the corporate reported its 2024 and fourth-quarter outcomes. However shares of the corporate are down 30.3% because the plan’s announcement, and 33.4% since Stewart grew to become CEO.
A spokesperson for Elliott, which has taken board seats at firms together with Southwest Airlines and eBay, declined to touch upon Goodyear. Goodyear reached a cooperation settlement with Elliott, which FactSet stories retains a roughly 9% stake within the firm, that included including three administrators to its board.
Stewart succeeded Goodyear CEO Richard Kramer, who retired after 14 years main the corporate.
Goodyear blimps
What began out as a brand new rising aeronautics enterprise for Goodyear in 1910 has grown right into a cultural icon as the corporate’s Goodyear blimps have flown over main sporting occasions and historic landmarks.
The primary Goodyear blimp, referred to as Pilgrim, took flight in 1925 from a hangar the corporate continues to make use of close to Akron, Ohio.
Goodyear has constructed greater than 300 blimps, often known as airships, together with over 200 for the U.S. Navy to patrol oceans throughout World Conflict II.
There have been 5 main era adjustments of the blimps, in response to Gerald Hissem, a chief pilot who has flown Goodyear blimps for 27 years.
“The know-how actually has superior,” he advised CNBC throughout a tour of the corporate’s hangar in Ohio. “It’s very totally different flying.”
Right this moment’s airship debuted in 2014 and have a “fly-by-wire” system that get rid of many bodily components, in response to Hissem. They have been designed by Zeppelin Luftschifftechnik GmbH in Germany to Goodyear’s specs, adopted by a joint group establishing them within the U.S.
The blimps are powered by three four-cylinder engines — left, proper and again — which can be every able to 200 horsepower. They’ll journey at speeds of as much as 73 miles per hour. Different blimp info embrace:
Airship bases: Pompano Seashore, Florida; Carson, California; Suffield, Ohio; and Essen, Germany.
Names: America, Columbia, Defender, Eagle, Enterprise, Europa, Mayflower, Pilgrim, Rainbow, Ranger, Reliance, Resolute, Spirit of Akron, Spirit of Goodyear, Volunteer.
Longest flight? In March 1957, an airship referred to as Snow Hen went 11 consecutive days in flight. It flew from Weymouth, Massachusetts, to Europe, Africa and Key West, Florida, with out refueling or touchdown.
Need to journey? Goodyear’s present blimps have a rest room, room for 2 pilots and usually six to eight passengers. To be a blimp passenger is by invitation solely, however the firm additionally donates “journey certificates,” largely for nonprofit causes.
‘Ahead’ progress
Goodyear is effectively on its technique to reaching its plan, however its success isn’t assured. Along with reaching its personal targets, it is unclear how altering laws similar to President Donald Trump‘s tariffs will influence the tire firm’s enterprise.
Stewart, previous to the implementation after which delay of 25% tariffs on Canada and Mexico for automakers and suppliers, declined to enter element on Goodyear’s preparation and potential contingency plans for such tariffs on North American operations in addition to different international locations.
“We’re operating all of the situations with that proper now,” Stewart mentioned. “And backside line is we’ll proceed so as to add initiatives into Goodyear Ahead to maintain marching on our journey.”
Goodyear has constructed up a world enterprise from its humble beginnings 127 years in the past in Akron, Ohio. The corporate employs about 68,000 folks and manufactures its merchandise in 53 services in 20 international locations, with main operations in North and South America, Asia-Pacific and Europe.
Its manufacturing operations within the Americas, which represented roughly half of its tire gross sales in 2024, embrace making tires in eight crops within the U.S., two crops in each Canada and Mexico and a plant every in Brazil, Chile, Colombia and Peru.
Goodyear’s inventory in 2025.
The Goodyear Ahead plan reaches throughout the operations, aiming to realize the targets via a mixture of price slicing, headcount reductions and making the enterprise extra environment friendly via new processes and applied sciences.
Along with these targets, Stewart additionally has set priorities to re-establish concentrate on its retail enterprise, enhance fleet enterprise, together with telematics, and ink high-profile enterprise offers similar to Goodyear’s first launch in many years on a Ferrari sports activities automotive.
“Goodyear Ahead is simply getting embedded into our DNA,” Stewart mentioned. “What’s subsequent for us is we’re going to get aggressive about progress in retail and repair. We’re getting aggressive in progress within the high-end [tires].”
Evolving enterprise
Tires — Goodyear’s predominant enterprise — appear easy. Rubber is made into totally different shapes and treads, placed on wheels after which placed on a car. They’re actually the place the rubber meets the highway.
However the course of, materials chemistry and manufacturing of tires proceed to evolve. Goodyear has expanded its top-tier merchandise to incorporate huge tires for off-road automobiles such because the Jeep Wrangler and Ford Bronco, in addition to the Tesla Cybertruck and enormous SUVs that function 22-inch or 24-inch wheels such because the Cadillac Escalade.
Such companies are extremely worthwhile for the corporate, which is investing an unspecified quantity right into a facility in Oklahoma to increase manufacturing by 10 million items yearly and modernize the plant.
A Goodyear worker works at a machine inside the corporate’s racing tire manufacturing facility at its headquarters in Akron, Ohio on Feb. 27, 2025.
Michael Wayland / CNBC
“We’ll guarantee we’re operating on the optimum stage of output and effectivity, and we’re operating the merchandise that can yield the best alternatives for profitability this 12 months,” Stewart mentioned final month on the corporate’s quarterly name.
In Asia–Pacific, the place its latest crops are positioned, the corporate has been in a position to capitalize sooner on such enterprise. It elevated its section working revenue by 37% final 12 months to $277 million, with an working margin of 11.4% — a juxtaposition from Western automakers with escalading issues within the area, particularly China.
Whereas its Asia–Pacific enterprise is a tailwind in the intervening time, merchandise from rivals and close by nations are usually not. Equally to how Chinese language automakers have expanded outdoors their very own nation, tire producers similar to Sumitomo and Yokohama have been more and more exporting merchandise.
Tires from that area have undercut Goodyear, as firms rushed to buy them forward of potential tariffs. Low-end imports outperformed the U.S. trade final 12 months and grew 11%, CFO Christina Zamarro mentioned through the firm’s quarterly earnings name.
Racing tires displayed contained in the manufacturing unit flooring of Goodyear’s headquarters in Akron, Ohio on Feb. 27, 2025.
Michael Wayland / CNBC
The corporate mentioned low-cost imported tires are largely sourced from Southeast Asia, together with from quite a few international locations which can be both not topic to antidumping or countervailing responsibility tariffs.
“As we have a look at the highest line this previous 12 months, we have seen progress within the low-end imports impacting the patron substitute trade within the U.S., Europe, as effectively Brazil,” Stewart advised traders. “The inflows on the low-end of the market over the past two years are unprecedented.”
Goodyear’s the final main U.S. tire firm: Its largest rivals globally are France-based Michelin; Bridgestone Corp., which is a subsidiary of a Japanese-based firm; and German-based Continental.
From wood flooring to tireless testing
At Goodyear’s headquarters, three flooring of a historic constructing for the corporate that was inbuilt 1916 proceed to supply racing tires, most notably for NHRA skilled lessons and the highest three collection for NASCAR.
The processes on this facility are conventional, with numerous human interplay in comparison with newer crops with extra automation like the corporate has at services in Luxembourg and China, and is increasing to the U.S.
Down the highway from the manufacturing unit, which options wooden floors much like these within the manufacturing unit in Detroit the place Henry Ford began building the Model T in 1900s, is a distinct Goodyear.
Goodyear’s VI-grade DiM250 Dynamic Driving Simulator in Akron, Ohio.
Goodyear
Strolling into the nondescript constructing within the shadow of the headquarters is a glimpse into the long run Stewart needs for the corporate.
Within the constructing is Goodyear’s simulation machine, a multimillion funding that guarantees to chop analysis and growth prices and time, whereas bettering product earnings.
To be clear, no precise tires are used within the simulator and the “car” cockpits — a hatchback and a pickup truck — are held up by hydraulics, encompass by 270 levels of screens.
“The purpose is to have the ability to consider and check tire designs and theories nearly earlier than ever having to spend the cash to construct a mould or construct the tire,” mentioned Patrick Renz, a senior engineer at Goodyear. “We’re actually utilizing this now to win [automaker business].”
Goodyear has labored with lots of the main automakers on such digital growth, together with Ferrari, in response to Renz. He mentioned the sooner within the growth Goodyear can work with an organization, the extra impactful the digital testing might be.
Idea tires displayed at Goodyear’s “Innovation Middle” at its headquarters in Akron, Ohio on Feb. 27, 2025.
Mahesh Kavaturu, Goodyear senior director of world efficiency and simulation know-how, mentioned such simulations, in addition to AI, intention to remodel Goodyear’s processes.
“We even have numerous capabilities on bodily tire testing, and now we’re stepping into synthetic intelligence, machine studying,” he advised CNBC within the firm’s “Innovation Middle” that features conceptual and distinctive merchandise made by the corporate such as airless tires. “In Goodyear, [AI] isn’t a buzz phrase.”
On Wall Road, hype is constructing for Goodyear, however many traders stay on the sidelines ready to see if the corporate’s current efforts below Goodyear Ahead might be ingrained within the firm as a lot as its blimps.
Goodyear’s inventory is rated chubby with a goal value of $11.47 a share, in response to 9 analysts compiled by FactSet.
“The corporate has reported inconsistent ranges of revenue progress over the previous a number of years. However, we consider that an inflection level developed with the reporting of fourth quarter 2024 outcomes, which have been a lot better than we anticipated,” Argus analyst Invoice Selesky mentioned in a Feb. 14 investor notice upgrading Goodyear to purchase.
