Motor vehicle

Goodyear Tire

Last edited by lenazun on November 25, 2009 - 8:42pm
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.

Chief executive officer: 
Robert Keegan
Website: 
Goodyear Corporation
Global Fortune 500 rank: 
472
Net Income: 
$ 602 million
Total revenue: 
$19.6 billion
Corporate accountability
Tax issues: 

According to Citizens for Tax Justice (CTJ), Goodyear was one of 24 companies that effectively paid a negative tax rate in 1998 -- negative $33.2 million. It paid negative 9.9 percent over the 1996-1998 period, the lowest rate during that period of all 250 companies surveyed. According to CTJ (p. 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 carry forwards 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 pay discrimination. The court found that the complaint had been filed too late; 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 and asserting that the ruling ignored workplace realities. (see Ledbetter v. Goodyear Tire and Rubber Company, No. 05-1074)

Environment and product safety: 

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

Auto Safety experts at Public Citizen suggested that 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 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 such as 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 had admitted it 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 (national and international): 

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 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 pleaded 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.

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

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

Goodyear moved its tires factories to the southern U.S. where plants in Lawton (OK), Gadsen (AL), Union City (TN), and Fayetteville (NC) were supplied with rubber from company plants in Houston and Beaumont (TX).

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: 
GT
Fiscal year: 
2007
Fiscal year: 
2007
Major lines of business/segments: 

Tires; chemicals, wheels, industrial rubber products, flooring and guidance systems for nuclear missiles.

Link to annual report: 
Hoover's financials on Goodyear
Sources
Watchdogs and related campaigns: 
Center for Auto Safety
Public Citizen