Goodyear Tire & Rubber Co. is pressing ahead with its Goodyear Forward turnaround plan, having trimmed roughly $1.5 billion in annualised costs from the business, yet the 128-year-old company still carried more than $7 billion in debt at the end of the second quarter and posted a net loss of $453 million through the first half of the year.
Goodyear Forward is the restructuring strategy the Akron, Ohio-based tyre maker has been running to cut costs, exit lower-margin businesses and reposition itself around premium products. Chief executive Mark Stewart has been its standard-bearer since joining from Stellantis in January 2024, adding his own layers of cuts and savings to a plan that was already in place when he arrived.
Asset sales raise cash but targets remain elusive
Two major disposals have completed under the programme. On 3 February 2025, Goodyear Investor Relations confirmed the sale of the company’s off-the-road tyre business to The Yokohama Rubber Company had closed. Then, on 7 May 2025, the sale of the Dunlop brand to Sumitomo Rubber Industries, Ltd. was completed, with gross cash proceeds of $735 million received at closing, according to Goodyear Investor Relations.
Those proceeds are helping fund a restructuring that has not yet cleared its financial hurdles. Stewart had set a target of reaching a 10% operating margin by the end of last year. The company came in at 8.5% in the fourth quarter, and hitting double-digit margins remains an outstanding goal. Operating income through the first half of the year stood at $131 million, a margin of just 1.6%.
On the income benefits side, the picture is more encouraging. Since inception, the Goodyear Forward programme has generated $1.25 billion of cumulative segment operating income benefits, exceeding its original commitment by approximately $150 million, according to Goodyear Investor Relations.
‘We’re working on getting to that double-digit margin, and we’re working on meaningfully generating cash flow,’ Stewart said. ‘It’s been a long time since Goodyear’s done that. That we absolutely must do.’
Headwinds from tariffs, raw materials and cheap imports
Stewart does not make excuses for the gaps, but he does point to a difficult external environment. Raw material costs are expected to be roughly flat year-over-year, yet a $200 million headwind is anticipated in the second half of the year, largely due to higher commodity costs associated with the conflict in the Middle East, according to the company and Wall Street analysts.
Argus analyst Bill Selesky, writing in an investor note dated 17 August, summarised the pressures bluntly: ‘Goodyear has faced many big challenges over the past few years, ranging from slower consumer (and commercial) demand, to rising raw material costs, to higher capital expenditures (capex), to low-priced Asian imports (into the U.S.), and, more recently, to trade and tariff legislation. It hasn’t been easy for Goodyear.’
Goodyear is rated a hold with a price target of $7.60, according to average analyst ratings compiled by FactSet. Shares closed most recently at $6.35, down 27% this year, and have fallen more than 50% since Stewart took the role.
Stewart is steering the company away from competing on price in lower-end segments. ‘We are not going to compete against a $6 or $10 converted tire,’ he said, referring to the manufacturing cost of turning raw materials into a finished tyre. The plan is to launch more than 1,600 new products this year, most in higher-margin, premium segments. Meanwhile, non-US brands, including Chinese manufacturers, have been expanding globally with cheaper products, applying further pressure on Goodyear’s market position.
Capital expenditure (capex) ran to roughly $2 billion combined across 2024 and 2025, with expectations of $725 million this year. Cash burn is expected to continue into 2027, though the company anticipates it will moderate. A plant closure announced for its Fayetteville, North Carolina facility next year is projected to improve its Americas segment operating income by $270 million annually. ‘We had to take a very difficult decision, but a necessary one,’ Stewart said of the closure. ‘We just didn’t have a pathway to be competitive out of that facility.’
Goodyear’s Asia-Pacific region is a relative bright spot, posting segment operating income of $63 million in the second quarter with an operating margin of 12.7%. Its US operations have been a main drag on overall financial performance.
The Goodyear Forward plan was prompted by activist investor Elliott Investment Management (EIM) revealing a stake in the company in 2023. A spokesperson for EIM, which supported three new Goodyear board members, declined to comment on the company or EIM’s current ownership status.
The turnaround was initially framed as a two-year programme ending last year, but Stewart has kept it running as the executive team works out what comes next. ‘At the right time, we will announce that,’ he said. ‘We continue to press ahead to the next challenges and make sure we get the business in the right space.’
