Excellent Results Despite Challenges

Q: How did external factors impact Goodyear’s performance in Mexico in 2016?

A: We saw excellent year-end results in 2016 compared to 2015, which was challenging within the context of an economy with slower growth. The projections for GDP growth for 2016 were overestimated and the Mexican peso’s value weakened unexpectedly following the US elections. In 2015, the currency devaluation was associated with oil prices, so when we worked on our plan for 2016 we did not anticipate these challenges. Changing circumstances forced us to revise our plan, adjust decisions and act on a larger scale.

We have grown in volume by improving the mix of products we sell and increased profitability by efficiently handling our costs, finally leading to the financial results of 2016. Alongside other Latin American countries with different economic contexts, Mexico’s automotive industry registered record production levels in 2016 and new vehicle sales in the local market helped spur our double-digit growth.

Q: What is Goodyear’s participation in the original equipment segment in Mexico?

A: We always maintain our position as the first or second- biggest brand in the country, both in car and SUV applications. This latter segment is growing quickly along with the light truck segment, especially in the north of Mexico. We participate in original equipment in all vehicle platforms as part of our company strategy, preparing for the consumer trends of the future.

Q: What need will Goodyear’s new production plant in San Luis Potosi address when it starts operating in 2017?

A: Our plant’s production will begin in mid-2017. In April 2015, we invested US$550 million to create the new Mexican plant and construction is progressing as planned. During 2016, 3.4 million vehicles were produced in Mexico and projections of infrastructure for vehicle manufacturing indicate that by 2020 there will be 5 million vehicles produced per year. Those vehicles will require the type of tires that we decided to produce in Mexico. The old vehicle park needed tires for 13 or 14-inch rims. Everything that is currently bought in Mexico is for 16-inch rims or larger and that vehicle platform requires production of high-performance tires. They must also meet increasingly complex technical specifications. Few manufacturers in the industry can meet the technical requirements of cars being sold today.

The plant we will open in 2017 will have top Goodyear technology, even more advanced than our other 50 sites around the globe. The quality of our staff and processes will afford us high-performance products to fit vehicles to be produced in Mexico. Even though the plant will begin production in the second half of 2017, we have already hired more than 400 personnel for the 1,000 direct jobs we want to create.

Q: How adept is the local workforce in skills they will be using at Goodyear’s high-tech facility?

A: We have been recruiting a completely Mexican workforce for the new plant. Last year, we developed the content of several school programs that could be useful for the plant in collaboration with the National College of Technical Professional Education (CONALEP), located in San Luis Potosi. We took 100 people to be trained outside of Mexico for four months and teams went to the US, Slovenia and Brazil for onsite training at Goodyear plants. This allowed them to see our quality standards and become familiar with the technology they will handle.

More than 4,000 candidates applied, which confirms the availability of local talent. In each of the plants they visited, weekly reports were made of the process evolution and our plant managers did not want to let the Mexican students go because they were so good. It did not surprise us that the talent we found in Mexico was more than qualified and we confirmed this when we sent them outside the country. These trainees came back to Mexico and began to train other people who will be part of our plant’s operations.

Q: What are the main trends driving innovation for Goodyear’s operations?

A: There are two major trends in the automotive industry. The first is looking for energy sources or alternative fuels that are eco-friendly and the second is to improve the driving experience, particularly as the industry moves toward autonomous vehicles. In alternative fuels, the most commonly seen advances are in electric cars. 'Goodyear innovatively designs and creates new products for electric vehicles in preparation for the market of the future. Driving an electric car is a much quieter experience than driving a gasoline-fueled car and this must be taken into consideration when developing new products for this segment.

Another innovation that Goodyear unveiled at the Geneva International Motor Show was its latest concept tire, called Eagle 360 Urban. It is designed for the cities of the future, which will have vehicles that are not only silent but also autonomous. Among the advantages of the concept tire is that by being spherical, it allows the vehicle to move in any direction. One of the most interesting developments we worked with was that when the tire detects water or a surface variation it can adapt its shape, or if it senses a defect on its surface, it will rotate to compensate without compromising performance. The damaged part will have no contact with the road and the Eagle 360 Urban will begin to self-repair thanks to recent advances in artificial intelligence.

Q: How is Goodyear innovating to improve the impact its products have on the environment?

A: From a manufacturing perspective, Goodyear does many things around the globe to show its ever-growing commitment to the environment. An example is the new San Luis Potosi plant, which will be a zero-waste-to-landfill and zero-solvent facility. It will use natural gas, energy-efficient LED lighting and top-notch dust-collection equipment. Some of these environmentally friendly initiatives are standard for all our facilities.

From a product perspective, there are also several factors that make Goodyear products more efficient for customers and their vehicles. We have technologies such as FUELMAX or our Efficientgrip tire line that lower rolling resistance. This not only lessens our clients’ fuel-related spending but also decreases emissions, thus helping the environment. These initiatives, technologies and products are strong statements to our unbroken commitment to the environment and our customers’ satisfaction.