Goodyear Tire transformation plan is moving company into the future

AKRON, Ohio — Does the Goodyear blimp sell tires?

That was one question veteran auto executive Mark Stewart had when he started as CEO of Goodyear Tire & Rubber Co. a little more than a year ago, seeking to lead a transformation plan for the quintessential American company.

For a century, Goodyear Tire has used more than 300 helium-filled airships to tout its brand. Stewart wanted to ensure consumers connected the blimps to the company’s products and services, which it has increasingly done as Goodyear celebrates the 100-year anniversary of its first blimp, called Pilgrim, in 1925.

“The answer is yes it can, and yes it does,” Stewart told CNBC during an interview at the company’s headquarters. “It really is about using one of our most powerful marketing icon pieces, the blimp, both here as well as in Europe, to in fact sell tires.”

The blimp question was an easy one to answer compared with the rest of the challenges Stewart, who has become known for transformation plans, has tackled since joining the company in January 2024.

Much like automakers and related suppliers, Goodyear’s business is rapidly changing with new technologies, increased competition from low-cost countries such as China and investor skepticism on whether a legacy company can transform itself to be more efficient, profitable and competitive.

Goodyear’s answer, which was prompted by activist investor Elliott Investment Management revealing a stake in the company in 2023, is “Goodyear Forward” — a two-year transformation plan that ends in December.

The plan includes doubling operating income margin to 10%, enacting top-line and cost reductions of $1.5 billion, and bringing in gross proceeds of $2 billion in business asset sales. It’s also reducing its debt load by $1.5 billion, net of approximately $1.1 billion for restructuring.

To assist, the company is investing in and deploying artificial intelligence technologies and 3D-printing for things such as tread teeth, as well as using simulation to speed development and production of its products.

Roughly halfway through the initial plan, Stewart said Goodyear is ahead of schedule for its benchmarks, including upping the cuts by $200 million. But investors remain skeptical amid geopolitical uncertainty such as tariffs and a disbelief in the longevity, or “stickiness” in tire terminology, of the changes.

Stewart believes Goodyear is at a “show me” period with investors, which he plans to continue to deliver on as the company has reported five consecutive quarters of margin growth and its best retail performance in more than 20 years.

“We’re continuing to…