The Goodyear Tire&Rubber Co.

Overview Key strengths Key risks One of the three largest tire manufacturers in the world, with well-recognized brand names. High operating leverage that requires ongoing heavy maintenance spending and research and development costs. Good geographic diversity and strong distribution channels. Exposure to volatile raw material costs, could offset the company's ongoing efforts to reduce its cost structure and improve productivity.Increasing competitive pressures from low-cost producers in the more-commoditized segment of the tire market. Strong liquidity, supported by access to a $2.75 billion North American revolver and an additional €800 million in Europe. In most of its geographies, sales in the replacement market have recovered above pre-pandemic levels. However, the original equipment manufacturer (OEM) market remains volatile, and volumes are still

...Goodyear's financial results have been solid, and leverage has fallen since the acquisition of Cooper, but free cash flow is expected to remain weaker in the near term. In most of its geographies, sales in the replacement market have recovered above pre- pandemic levels. However, the original equipment manufacturer (OEM) market remains volatile, and volumes are still well below levels before COVID due to supply chain constraints. Goodyear's margins have held up quite well over the last few quarters despite inflation in raw materials, labor, energy, and shipping. The ability to directly pass through pricing to the consumer in its replacement market has allowed the company to offset higher costs to maintain margins, particularly in its largest market, North America. In the OEM market, it has been tougher to pass on higher raw material costs, particularly in China, where there is less indexing of raw materials in pass-through pricing contracts. While we expect some margin pressure in 2022...

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