The Goodyear Tire & Rubber Company (NASDAQ:GT) Q2 2023 Earnings Call Transcript

Right, it’s kind of what I said, I mean for us we saw the industry members down 12% after being down 13%. I think you’ll see a lot of imports coming in as well. And on the low end of the market, a lot of those imports that came in last year are actually making their way to the market now that certainly had an impact on the overall market, but from a member perspective is about 12% following 13%. And then we had really weak sell out as well. I mean people just weren’t buying as the economy continues to cause people to cause our distribution to not go long on inventory and causes consumers to be more cautious on how they’re spending their money. That’s not going to last forever, that will change, Rod. But right now, that’s what we’re seeing and candidly it was worse than we expected.

What we’re doing about it maybe is equally important, and that’s one, we’re still strong on price and mix. Our European business I think, Christina, for the first time well over a year we offset raw material and inflation with price mix. We’ll see those raw material tailwinds come back into the second quarter. That’s a positive. But we have to then take those actions on cost that I mentioned earlier. So we’re not going to sit still, but rather the market was certainly weaker and we felt it.

Rod Lache: I understand what you’re saying about the market. Rich, I’m really asking about Goodyear specific underperformance. So when consumer replacement the market was down 4%, the members were down 12%, you’re down 26% and in commercial replacement the industry is down 15% and you’re down 34%. So what is, I imagine that that the delta versus your expectations obviously, it’s partly the industry was weaker, but isn’t the magnitude of the underperformance relative to the industry a factor too?

Christina Zamarro: Well, Rob, maybe I’ll jump in here, and this was noted in our letter on the summary of the quarter reflections page, but in Europe, we gained a lot of share in the second quarter of last year versus the industry. So this year was more of a normalization as just sell in share. Now this is a reflective of what’s happening in sell-out, but last year, we picked up a couple of points a share versus the industry. So our volume much stronger than our major competitors. This year we’re giving that back, but that was essentially in our plan albeit at better industry levels.

Rod Lache: Okay. And just lastly on the strategic side, I mean, Europe has been a challenge for Goodyear for as long as I’ve covered the company and I’m just, just wondering if you believe that that business is ultimately strategic to the company and whether there’s alternatives that could actually create some value from that, from that region.

Richard Kramer: Well Rod, I have to say there are alternatives that we have to look at in terms of everything from going to market to the brand portfolio to the segments that we play in. I think all those things have to be on the table. But to answer your question on it being a strategic, I think as we look at the OEMs that work over there and we look at the technology trends that they tend to lead not solely but they tend to lead, it’s a market that our technology plays very well there and we have to be there. How we turn up, I think is the question that we have to continue to look at, but some of the most complex problems from a vehicle perspective, a mobility perspective take place in Europe and that’s where we have some of our best technology.