Goodyear Tire

Last edited by apocalypticbeef on July 16, 2008 - 5:20pm

Company Snapshot:

Goodyear is the third largest tire manufacturers in the world, behind Bridgestone and Michelin. Goodyear operates more than 50 plants worldwide, as well as about 1,800 retail tire and auto centers. The company has sold its Engineered Products division to The Carlyle Group.

Ownership status:

Publicly traded

Chief executive officer:

Robert Keegan

2008 Global Fortune 500 rank:

410

Website:

Goodyear Corporation

Corporate accountability

Tax issues:

According to Citizens for Tax Justice, Goodyear was one of 24 companies that effectively paid a negative tax rate in 1998 -- negative $ 33.2 million. The company paid negative 9.9 % over the 1996-1998 period, the lowest rate during that period of all of the 250 companies surveyed. The group explained why on page 48: "In 1998, the company received an income tax refund of $28 million. the two largest tax-cutting items were book write-offs taken prior to 198 that became tax-deductible in 1998 and alternative Minimum Tax credits. Combined these two items reduced the company's 1998 taxes by $94 million. (AMT credits were $40 million a year in 1998 and 1996, while the company paid $8 million in AMT in 1997.) Tax benefits from stock options (as calculated) saved the company $6, $19 and $14 million in 1998, 1997, and 1996. At the end of 1998, the company had $24 million in AMT credit carryforwards available to reduce future income tax liability."

Labor:

In 2007, The Supreme Court ruled 5-4 against a female supervisor from Goodyear's Gadsden, AL plant who had sued the company for discrimination in pay, insisting that the complaint was filed too late. The dissenters said the ruling ignored workplace realities. The court held that employees cannot bring suit under the principal federal anti-discrimination law unless they have filed a formal complaint with a federal agency within 180 days after their pay was set. Justice Ginsburg read her dissent from the bench, inviting Congress to overturn the decision. (see Ledbetter v. Goodyear Tire and Rubber Company, No. 05-1074)

Environment and product safety:

Despite closing a number of U.S. plants, Goodyear ranked 25th among the largest U.S. air polluters in 2002.

Auto Safety experts at Public Citizen suggested the company's decision to cover up a defect in its Load Range E tires rather than inform auto safety regulators demonstrated the need for criminal sanctions in auto safety rules: "Goodyear executives knew they wouldn't be seriously punished for their decision, because the law does not provide for criminal penalties for knowingly concealing such critical data from regulators. And the maximum civil penalty, until the new law was passed last month, was a mere $925,000. It is now a maximum of $15 million. ... At least 15 people have been killed and 129 injured in crashes linked to these Goodyear tires. It is inexcusable that the company failed to warn consumers about the dangers of the 21 million tires, manufactured from 1991 to 1999, that auto safety regulators will investigate. The company is now blaming consumers, attributing these catastrophic crashes to "overloading" and "underinflation.""

Human rights:

During the Apartheid Government era in South Africa, a Goodyear International spokesperson told Multinational Monitor magazine that his company -- which employed nearly 2,500 people in South Africa at the time -- had no plans to divest: "We run a completely desegregated plant in South Africa - there is no apartheid in our company."

Philippine opposition leader Benigno Aquino told the Multinational Monitor in 1981 (during the Marcos regime) that rubber companies like Goodyear and Goodrich "control us ... The tires in the Philippines are 20 years old. We don't have these radials, these spirals; ah, we're a throwback. They give us hand-me-downs; they transfer obsolete technology or equipment that's already been discarded, and they enter it in our books as brand new. And then after that, their profit remittances are based on all these capital transfers."

Anti-competitive and consumer protection:

In 2007 Reuters reported that Goodyear admitted it had received a U.S. grand jury subpoena for documents related to a global antitrust investigation into alleged price fixing in the marine hose industry. The company said it did not believe it was the target of the investigation.

Political influence:

From Everybody's Business: "Goodyear, which gives its blimps patriotic names like "America" and "Mayflower," was one of the companies which made illegal contributions to Richard Nixon's 1972 reelection campaign and was fined. Between 1964 and 1972 Goodyear gave out up to $242,000 in questionable donations to politicians from a slush fund in a foreign bank. But they do not appear to be particularly sorry about it. ... Goodyear was also generous with foreign politicians: between 1970 and 1975 they gave out $845,000 in very questionable payments from slush funds maintained by foreign subsidiaries." (p. 297).

Goodyear officials admitted to violating the Foreign Corrupt Practices Act by paying nearly $1 million in bribes to Iraqi officials via Greek intermediaries in exchange for $19 million in tire business from the Iraqi government between 1979 and 1983. The corporation pled guilty to one count of FCPA bribery and was fined $250,000. No individuals were charged. (See U.S. v. Goodyear International Corp., (Cr. No. 89-0156), D.D.C, 1989)

Trade Policy Violations

Goodyear paid $195,000 to settle charges brought by the U.S. Treasury Dept.'s Office of Foreign Asset Controls (OFAC) for trading with Cuba in violation of U.S. trade policies.

History

The Goodyear Tire & Rubber Company was founded in 1898 by 38-year-old Frank Seiberling, who named the company after the discoverer of vulcanized rubber - Charles Goodyear. By 1916 the company was the largest tire manufacturer in the U.S.

When the company floundered on the edge of financial ruin after World War I, Dillon, Read & Co. stepped in to reorganize the company.

For years they were headquartered in Akron, Ohio. Known as "The Brute," the company closed their last passenger car tire factory in the city once known as the tire capital of the world in 1978, after the United Rubber Workers refused to make wage concessions. (In 1929 Akron produced 75% of U.S. car tires).

The company moved its tires factories to the Southern U.S. -- Lawton (OK), Gadsen (AL), Union City (TN) and Fayetteville (NC) -- all supplied with rubber from the company's plants in Houston and Beaumont.

Goodyear was slow to offer radial tires in the U.S., despite their widely acknowledged superior performance and longer life than bias-poly tires. In the early 1970s, as the radial tire market expanded, Goodyear finally entered the market.

Goodyear first introduced its airships (blimps) during World War II for naval escort duty.

Financial information

Stock ticker symbol:

Total revenue:

$19.6 billion

Fiscal year:

2007

Net Income:

$ 602 million

Fiscal year:

2007

Major lines of business/segments: