Goodyear Tire & Rubber Company GT said Richard J. Kramer has informed the Board of his plans to retire as Chairman, CEO and President of the company in 2024.
The Goodyear Board has retained a leading executive search firm to execute a search considering both internal and external candidates.
Transformation Plan: The company also announced a "Goodyear Forward" plan to optimize its portfolio, with cost reduction actions driving an annual run-rate benefit of $1 billion by the end of 2025.
The company aims for gross proceeds in excess of $2 billion from portfolio optimization and has decided to pursue strategic alternatives for its Chemical business, the Dunlop brand, and the Off-the-Road equipment tire business.
The company expects Goodyear Forward to deliver top-line actions, driving an annual run-rate benefit of $300 million by the end of 2025.
With the above actions, the company expects segment operating margin to double from approximately 5% in 2023 to 10% by the fourth quarter of 2025.
In addition, GT expects debt reduction of approximately $1.5 billion, net of approximately $1.1 billion for restructuring.
On behalf of Elliott Investment Management, one of Goodyear's largest investors, Senior Portfolio Manager Marc Steinberg and Portfolio Manager Austin Camporin said, "..we look forward to continuing our dialogue with the Company as it implements these initiatives and works to deliver the substantial upside value that we see for all Goodyear shareholders."
In July, GT entered a cooperation agreement with Elliott Investment Management and agreed to establish a Strategic and Operational Review Committee to oversee and support the review of various strategic and operational alternatives.
Price Action: GT shares are trading higher by 2.86% at $14.05 on the last check Wednesday.
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