THE RUBBER HITS THE ROAD; GOODYEAR NO. 1 AFTER SUMITOMO DEAL.Byline: Noelle Knox Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. Goodyear Tire & Rubber Co.'s $1 billion global alliance with Japan's Sumitomo Rubber Industries Sumitomo Rubber Industries, Ltd. (住友ゴム工業株式会社 Ltd. announced Wednesday restores Goodyear's place as the world's largest tire maker - for now. The deal that makes Goodyear a $15 billion business is expected to spur more consolidation in the $70 billion tire industry as rivals try to protect their profits in the face of excess capacity and cheap imports from Asia and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . Separately, Goodyear announced a new global cost-cutting drive that will result in the layoffs of up to 2,800 employees, many of them in Gadsden, Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. ., where Goodyear will stop making tires at a plant that established the rubber industry in the South 70 years ago. Driving Goodyear's decision to reduce its work force of 95,000 by as much as 3 percent and to team up with Sumitomo is a glut glut pronounced as rut, slut Vox populi An excess of a service or skilled labor in a particular area. See Physician glut. of tire production capacity. Today's radial radial /ra·di·al/ (ra´de-al) 1. pertaining to the radius of the arm or to the radial (lateral) aspect of the arm as opposed to the ulnar (medial) aspect; pertaining to a radius. 2. tires last four times longer than the bias-ply treads of the 1960s, so people don't have to replace them as often. At the same time, new technology has made tire factories more efficient. Goodyear's competitors, wrestling wrestling, sport in which two unarmed opponents grapple with one another. The object is to secure a fall, i.e., cause the opponent to lose balance and fall to the floor, and ultimately to pin the supine opponent's shoulders to the floor, through the use of body with the same issues, also could look for partners to help cut costs while expanding into new markets. ``Consolidation is where the industry is being driven,'' said Bruce Davis This article is about the American football player. For the American businessman, see Bruce Davis (video game industry). Bruce Davis (born June 21, 1956, in Rutherfordton, North Carolina) is a former professional American football player. , special projects editor for Rubber and Plastics News and Tire Business, two trade publications. ``There are three or four candidates out there who could use a partner.'' Among the most likely targets, Davis said, are Japan's Yokohama Rubber Co. Ltd., Toyo Tire & Rubber Co. Ltd., Italy's Pirelli SpA and South Korea's Kumho Tire Co. The industry's leader, Japan's Bridgestone Corp., and No. 2 Michelin SA of France, have dominated the industry for nearly a decade and could be in the market. Goodyear also said Wednesday that tire sales grew less than 2 percent in the fourth quarter of 1998. ``Weak emerging markets, volatile foreign currencies and brutal competitive actions impacted our results,'' said Samir G. Gibara, Goodyear's chairman and chief executive. Investors cheered the day's announcements, which included the report of earnings that met Wall Street expectations. Goodyear's stock rose 3.2 percent on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , where it gained $1.625 to close at $52. Goodyear will invest $1 billion into the new global alliance with Sumitomo, and form six joint ventures that will give Goodyear control of Sumitomo's operations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). . Goodyear also will acquire 10 percent of Sumitomo's stock, worth about $88 million. Sumitomo will acquire the same dollar value of Goodyear's stock, or about 1 percent of Goodyear's shares. Goodyear, currently the world's third-largest tire producer, and Sumitomo, No. 5, already have a manufacturing agreement. Sumitomo makes Goodyear-brand tires for Nippon Goodyear, and Goodyear supplies Dunlop-brand tires to Sumitomo's U.S. factories. TIRE KING ONCE AGAIN Goodyear Tire & Rubber Co. may once again be the world's largest tire maker if the proposed $1 billion alliance with Japan's Sumitomo Rubber Industries Ltd. takes place. The deal may initiate mergers among Goodyear's rivals trying to protect their profits. 1997 World Market Share The global tire market is a $70 billion industry Goodyear/Dunlop/Sumitomo (x): 21% (xx) Bridgestone: 18.6% Michelin: 18.3% Continental General: 6.3% Pirelli: 4.4% Yokohama: 3.4% Cooper: 2.1% Kumho: 1.8% Toyo Tire: 1.9% Other: 22.2% 1997 U.S. Market Share In the United States, tires are a $21 billion industry Goodyear/Dunlop/Sumitomo (x): 33.3% Bridgestone/Firestone: 21% Michelin/Uniroyal/BF Goodrich: 22% Continental General: 6.5% Cooper: 6.5% Other: 10.7% (x) Alliance pending (xx) Alliance doesn't include all operations SOURCE: Tire Business magazine CAPTION(S): Photo, 2 Charts PHOTO (Color) Randy Kuntz, a technician See PC technician and software technician. at the Goodyear Auto Service Center in Amherst, N.Y., works on a Dunlop tire Wednesday. David Duprey/Associated Press CHART: (1) 1997 World Market Share (see text) (2) 1997 U.S. Market Share (see text) |
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