Goodyear Tire transformation plan is moving company into the future
For over 125 years, The Goodyear Tire & Rubber Company has been a titan in the tire industry, synonymous with innovation, durability, and American ingenuity. From its humble beginnings in Akron, Ohio, in 1898, Goodyear has grown into one of the world’s leading tire manufacturers, serving consumers, commercial fleets, and even NASCAR racers. Yet, as the automotive landscape evolves with electric vehicles, advanced technologies, and heightened competition from low-cost global players, Goodyear finds itself at a pivotal moment. Enter the “Goodyear Forward” transformation plan—a bold, strategic roadmap designed to modernize the company, boost profitability, and secure its position as a leader in the mobility revolution.
The Genesis of Goodyear Forward
Announced on November 15, 2023, Goodyear Forward is a comprehensive strategy born from a rigorous evaluation by the company’s Strategic and Operational Review Committee, spurred by activist investor Elliott Investment Management’s push for change. With a stake in the company, Elliott saw untapped potential in Goodyear’s stock—once projected to climb back to $32, a level not seen since 2000—and urged a shake-up to maximize shareholder value. The result? A two-year plan, set to conclude in December 2025, aimed at streamlining operations, doubling operating income margins, and reducing financial leverage.
The plan addresses a rapidly shifting industry. Rising costs post-COVID, the transition to electric vehicles (EVs), and competition from low-cost tire producers in Asia have squeezed margins and challenged Goodyear’s traditional business model. “As a company and arguably as an industry, we’re facing a unique moment in time where fundamental changes to cost structures and competition are reinforcing why Goodyear needs to position itself differently for the future,” said outgoing CEO Richard J. Kramer in 2023. Under new leadership with Mark Stewart, who took the helm in January 2024, Goodyear is accelerating its transformation to meet these challenges head-on.
Key Pillars of the Transformation
Goodyear Forward rests on several ambitious financial and operational goals:
- Portfolio Optimization: Goodyear is shedding non-core assets to generate over $2 billion in gross proceeds. This includes exploring strategic alternatives for its Chemical business, the iconic Dunlop brand, and its Off-the-Road (OTR) equipment tire division. A significant milestone was achieved in February 2025, when Goodyear sold its OTR tire business to The Yokohama Rubber Company for $905 million, a move CEO Mark Stewart called “a key milestone” in simplifying the company’s structure and sharpening its focus.
- Cost Reduction and Efficiency: The company targets $1.5 billion in gross run-rate gains by the end of 2025, up from an initial $1.3 billion goal. This includes $1 billion in annual cost reductions through plant optimization, supply chain enhancements, and streamlined R&D, alongside $300 million in top-line improvements from better brand positioning and premium product focus in North America. By mid-plan, Goodyear reported being ahead of schedule, raising its 2024 gross benefits forecast to $450 million.
- Margin Expansion: Goodyear aims to double its segment operating income margin from 5% in 2023 to 10% by Q4 2025. This leap reflects the combined impact of cost cuts, divestitures, and a shift toward high-value products—an ambitious yet achievable target given the company’s early progress.
- Debt Reduction: With a goal of reducing net leverage to 2.0x–2.5x by the end of 2025, Goodyear is strengthening its balance sheet. The OTR sale proceeds, for instance, are earmarked to cut debt by approximately $1.5 billion (net of $1.1 billion in restructuring costs), moving the company closer to an investment-grade rating.
Innovation as the Engine of Change
Beyond financial restructuring, Goodyear Forward leverages cutting-edge technology to redefine its future. The company is investing heavily in artificial intelligence (AI), 3D printing, and simulation tools to accelerate tire development and enhance performance. At its Akron headquarters, the VI-grade DiM250 Dynamic Driving Simulator—a multimillion-dollar investment—slashes R&D time and costs by virtually testing tire designs, a stark contrast to the labor-intensive methods still used in its historic racing tire factory nearby.
AI isn’t just a buzzword at Goodyear. “We actually have a lot of capabilities on physical tire testing, and now we are getting into artificial intelligence, machine learning,” said Mahesh Kavaturu, Goodyear’s senior director of global performance and simulation technology, in a recent CNBC interview. These tools are crafting smarter, more sustainable tires—like the airless, non-pneumatic tires (NPTs) in testing for EVs and autonomous vehicles, promising maintenance-free mobility.
Goodyear’s iconic blimps, celebrating their 100th anniversary in 2025, also play a role. Stewart has emphasized linking these marketing icons to tire sales, reinforcing brand strength as the company modernizes. “The answer is yes it can, and yes it does,” he told CNBC, highlighting their evolving role in connecting with consumers.
Progress and Challenges
Halfway through the plan, Goodyear is outperforming expectations. Four consecutive quarters of operating margin expansion by late 2024 signal strong execution, with Stewart crediting the team’s talent and the company’s “strong foundation.” The $200 million increase in cost-saving targets reflects this momentum, projecting $750 million in additional benefits for 2025.
Yet, challenges linger. Investors remain cautious, with Goodyear’s stock rated overweight but hovering below its potential, per FactSet’s $11.47 target. Geopolitical uncertainties, such as tariffs, and doubts about the “stickiness” of these changes—whether they’ll endure beyond 2025—keep Wall Street on the sidelines. Inflation, declining tire shipments, and weaker fleet demand have also pressured results, though Goodyear’s $58 million Q1 2024 loss marked an improvement from the prior year’s $99 million deficit.
A Future on Firm Footing
Goodyear Forward is more than a financial overhaul—it’s a reinvention. By shedding legacy burdens, embracing technology, and refocusing on its core strengths, Goodyear is positioning itself not just to survive but to thrive in a mobility landscape dominated by EVs, automation, and sustainability. The sale of its OTR business, advancements in smart tire technology, and a leaner cost structure are tangible steps toward a more agile, profitable future.
As Mark Stewart steers Goodyear into its next chapter, the company’s 127-year legacy meets a forward-thinking vision. Whether it’s in the sky with its blimps or on the ground with innovative tires, Goodyear is proving that transformation isn’t just about keeping pace—it’s about setting the pace for the next century of mobility.
