Goodyear Projects Continued Growth in China, Won't Talk Tariffs
Goodyear expects its income to continue to grow by 10 to 15 percent this year as it deconsolidates its subsidiary in economically-troubled Venezuela and consolidates its North and South American divisions.
During its annual earnings call with analysts, Goodyear was asked about the attempt by the United Steelworkers to try to raise tariffs on imports of heavy truck tires – similar to the ones it got on passenger tires imported from China last year.
Chairman Richard Kramer wouldn’t comment on specifics, but said generally, tires find new markets when economics change.
“As we’ve seen in the past, those tires end up going to different places. So we saw consumer tires go down to Latin America a number of years back when the re-al was very strong. More recently we’ve seen consumer tires go to Eastern Europe. So tires will move around.”
In 2015, and for the first-time in its history, Goodyear topped $2 billion in operating income last year. But thanks in part to struggles in Venezuela -- where inflation is rampant and the economy in a shambles -- it saw a fourth-quarter loss and tire sales fell.
Still, that beat analysts’ expectations. And Goodyear Chairman Richard Kramer said in a conference call today that – despite some recent shakiness -- markets in China and India continue to look strong.
“While we expect continued volatility in the next few months, we remain confident I the long-term market outlook in China with continued growth in the middle class fueling growth in the automotive sector.”
The company also said it expects its new manufacturing plant in Mexico to begin testing tire production early to mid-next year and to be in full production by the end of 2019.