AKRON Goodyear chairman announces resignation

The new chairman is out to cut costs by at least $1 billion.
AKRON (AP) -- Goodyear Tire & amp; Rubber Co.'s next chairman told shareholders that bringing the world's biggest tire maker back to profitability will be a challenge.
"I relish the challenge. I don't underestimate the substantial hurdles that confront us," said Robert J. Keegan, 55, Goodyear's president and chief executive.
Chairman Samir G. Gibara told shareholders Wednesday he is resigning as of June 30, culminating the company's leadership transition plan.
Keegan, whom Gibara hired from Eastman Kodak Co. in 2000, will take over as chairman.
Gibara, 63, who has been with the company for 37 years, was elected president and CEO on Jan. 1, 1996, and became chairman six months later.
He acknowledged at the company's annual shareholders meeting that Goodyear has fallen on hard times.
"While we have enjoyed many successes, there is no question I am disappointed with the recent performance of the company, and I think you are disappointed as well," he said.
Record loss
Akron-based Goodyear recently reported a record $1.1 billion annual loss.
Goodyear's depressed shares have rebounded somewhat but traded down 25 cents, or 3.5 percent, at $6.82 Wednesday on the New York Stock Exchange. The shares were trading at more than $20 a year ago.
Gibara has been working closely with Keegan on a turnaround plan that features cutting costs and focusing on the core tire business.
"The turnaround is under way, and Goodyear is in good hands," Gibara said.
Keegan told shareholders a key strategy will be to reduce costs by $1 billion to $1.5 billion by the end of 2005, and that the company also will look to sell some of its non-tire businesses, such as its chemical division.
Goodyear lost $163.3 million, or 93 cents per share, in this year's first quarter despite increased sales. The company is determined to reduce costs, possibly by cutting jobs, but no specific job cuts have been revealed.
Contract talk
Steelworkers and Goodyear are in negotiations for a contract that could be applied to other tire manufacturers. The union's contract with Goodyear expired April 19, but the union and company agreed to extend it while negotiations continue in Cincinnati.
The company has been especially concerned with a struggling North American tire segment. The business recorded an operating loss of $61.5 million, compared with a loss of $51.3 million in the 2002 first quarter.
Goodyear makes tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It employs about 92,000 people.