Goodyear Extends Turnaround as Cash Burn Continues With Debt Above $7 Billion
Updated
Updated · CNBC · Aug 29
Goodyear Extends Turnaround as Cash Burn Continues With Debt Above $7 Billion
1 articles · Updated · CNBC · Aug 29
Summary
Goodyear said cash burn will continue into 2027 as it presses on with its Goodyear Forward overhaul, even after missing its target for a 10% operating margin by the end of 2025.
The tire maker posted a $453 million net loss in the first half, operating income of $131 million and a 1.6% margin, while carrying more than $7 billion of debt and spending about $2 billion on capex across 2024 and 2025.
A $200 million second-half headwind from higher commodity costs tied largely to the Middle East conflict, along with tariffs and low-priced Asian imports, has weighed on the turnaround and on shares, down more than 50% since CEO Mark Stewart took over in January 2024.
Goodyear says the plan has cut about $1.5 billion in annualized costs and is shifting the company toward premium tires, with more than 1,600 new products due this year and the Fayetteville, North Carolina, plant closure expected to lift Americas operating income by $270 million annually.
Asia-Pacific remains a bright spot with a 12.7% second-quarter operating margin, but weak U.S. performance and slower consumer demand leave the 128-year-old company still searching for sustainable double-digit margins and positive cash flow.