The Goodyear Tire(GT) - 2024 Q4 - Annual Report

Financial Performance - In 2024, Goodyear reported net sales of $18,878 million and a net income of$70 million[8]. - Goodyear's net sales for 2024 were $18,878 million, a decrease from$20,066 million in 2023, primarily due to lower tire volume and negative foreign exchange impacts[196]. - The company reported a net income of $70 million, or$0.24 per share, in 2024, compared to a net loss of $689 million, or$2.42 per share, in 2023[198]. - Total segment operating income increased to $1,318 million in 2024, up from$968 million in 2023, driven by benefits from the Goodyear Forward plan and lower raw material costs[199]. Sales and Market Performance - In 2024, Goodyear's tire unit sales totaled 166.6 million, a decrease from 173.3 million in 2023[19]. - The Americas segment accounted for 81.6 million tire units sold in 2024, down from 87.3 million in 2023[30]. - EMEA segment sold a total of 48.9 million tire units in 2024, a decrease of 2.0 million units or 4.0% from 2023[36]. - Replacement tire units in EMEA were 36.0 million in 2024, down from 36.8 million in 2023, reflecting a decline of 2.2%[36]. - Asia Pacific segment maintained total tire unit sales at 36.1 million in 2024, unchanged from 2023, with OE tire units increasing by 7.5% to 18.0 million[41]. - Sales to original equipment (OE) customers accounted for approximately 18% of net sales in 2024, indicating reliance on automotive production levels[114]. Strategic Initiatives - Goodyear aims to achieve gross proceeds exceeding $2 billion from portfolio optimization by pursuing strategic alternatives for its chemical business, Dunlop brand, and OTR tire business[13]. - The company plans to implement cost reduction actions to achieve an annual run-rate benefit of approximately$1.3 billion by the end of 2025[13]. - Goodyear announced the "Goodyear Forward" transformation plan on November 15, 2023, focusing on portfolio optimization and margin expansion[82]. - The Goodyear Forward transformation plan is expected to provide approximately $200 million in benefits for Q1 2025 and$750 million for the full year[202]. Product Development - Goodyear launched several new consumer tires in 2024, including the Goodyear Assurance WeatherReady 2 and the Goodyear ElectricDrive 2[27]. - New consumer tires launched in EMEA include the Goodyear Eagle F1 Asymmetric 6 and Dunlop All Season 2, targeting summer SUV and all-season segments[34]. - Asia Pacific introduced new commercial tires for Goodyear Kmax and Urbanmax lines, enhancing its product portfolio[39]. - The company introduced the ElectricDrive 2 tire with 50% sustainable materials by weight in early 2024, and plans to launch a 100% sustainable material tire by 2030[68]. Environmental and Sustainability Goals - Goodyear aims for net-zero greenhouse gas emissions by 2050, with a 46% reduction in Scope 1 and 2 emissions by 2030 from a 2019 baseline[62]. - Goodyear aims to use 100% renewable electricity in all manufacturing facilities by 2030 and 100% renewable energy by 2040[66]. - The company is focusing on sustainable material sources to enhance supply chain resiliency and product performance[67]. - Goodyear's commitment to reducing operational impacts includes setting facility-specific goals for energy consumption and GHG emissions[66]. Operational Challenges - The company faces risks related to the successful implementation of its strategic initiatives, which could materially affect its financial condition and liquidity[88]. - The company faces significant global competition, with major competitors including Bridgestone and Michelin, which could impact market share[97]. - Economic downturns or uncertainties could negatively impact consumer spending and automotive production, affecting overall sales[104]. - The company may experience disruptions in operations due to labor relations issues or supply chain challenges, impacting financial performance[115]. - Compliance with complex international laws increases operational costs and risks, potentially affecting business continuity[111]. Financial Position and Debt - As of December 31, 2024, the company's consolidated debt, including finance leases, was approximately $7.8 billion, which could restrict growth and financial health[130]. - The company has approximately$1.9 billion of variable rate debt outstanding, exposing it to interest rate risk that could increase debt service obligations[141]. - Capital expenditures are limited by liquidity and capital resources, potentially affecting the company's competitive position[100]. - The company may need to undertake additional financing actions to ensure future liquidity requirements are met, which could include issuing additional debt or equity[126]. Manufacturing and Facilities - The company operates 53 manufacturing facilities globally, including 18 in the United States[176]. - The company is closing high-cost manufacturing facilities and investing in modernizing others to improve competitiveness and increase production of premium tires[85]. - The company is undertaking significant construction, expansion, and modernization projects globally to enhance manufacturing capabilities[101]. Currency and Economic Impact - Foreign currency translation unfavorably affected sales by $192 million and segment operating income by$16 million for the year ended December 31, 2024, compared to the previous year[164]. - Net foreign currency exchange losses were $9 million for the year ended December 31, 2024[164]. Employment and Workforce - Approximately 68,000 associates were employed globally as of December 31, 2024, with significant union representation in the U.S. and Europe[47]. - The company must successfully attract and retain key personnel to maintain operational effectiveness, with competition for skilled employees being intense[118]. - The company faces increasing competition for skilled workers, which may lead to higher compensation costs and difficulties in maintaining a capable workforce[119].