TIRE RETAIL Goodyear sales bring in good news

The 106-year-old company set a sales record in the first quarter.
CLEVELAND (AP) -- For more than a year, the bad news piled up at Goodyear Rubber & amp; Tire Co.: slumping revenue, financial restatements, accounting errors and job cuts.
These days, things are looking up for the nation's largest tire maker based in Akron.
Goodyear spokesman Keith Price said this week that the 106-year-old company had record first-quarter sales of $4.3 billion.
And shares -- which last year hit a $3.67 low -- were up to $9.60 Friday on the New York Stock Exchange.
The company, dealers and analysts say improved dealer relationships and strong demand for new products in an improved tire market are among the reasons sales are spiking.
"Certainly seeing their sales improve is good news," said Saul Ludwig, a Goodyear analyst at McDonald Investments in Cleveland. "They seem to be making progress."
Past year
Over the past year or so Goodyear has lessened sharp losses and signed a new labor agreement with the United Steelworkers of America. Losses narrowed last year to $802 million compared with $1.1 billion in 2002, an improvement the company predicts will continue when it reports delayed first-quarter earnings later this month.
The past year also was turbulent with restructuring costing Goodyear more than $3 billion in loans to avoid a liquidity crunch. The company also slashed 6,000 jobs and closed or scaled back factories around the world and acknowledged accounting errors that cost Goodyear $280 million.
Goodyear's turnaround plan includes reducing costs by $1 billion to $1.5 billion by the end of 2005 and possibly selling some of its nontire businesses. The company, which employs about 88,000 people, manufactures tires, engineered rubber products and chemicals in more than 85 facilities in 28 countries.
Ludwig said Goodyear and other tire companies were helped by a strong first quarter in which tire sales were up 7 percent over the same quarter last year. High gas prices in the second quarter may make the success short-lived, he said.
Not a secret
Goodyear has made no secret about its efforts to improve relationships with private dealers by doing things such as communicating better and improving products and promotion.
John Turk, a dealer who runs 26 Cleveland area tire stores, credits the new Assurance all-weather tire line and the massive advertising accompanying it with helping to get people back in the stores.
"We definitely have customers walking in and asking for it. My biggest problem with the Assurance product is just getting it in," Turk said.
Price said besides the Assurance buzz, Goodyear is benefiting from strong sales of new semi-truck and other specialty tires. While promotion and orders for Assurance began the first quarter, the tires weren't shipped until the second quarter, giving the company something to look forward to, he said.
"These tires command higher prices and better margins," Price said.
On Wednesday, Goodyear announced full first-quarter 2004 earnings would be delayed because it needed more time to complete financial statements.
The company said it expected a sharply narrowed loss of $75 million to $85 million.
Goodyear had sales of $3.5 billion and a loss of $196.5 million in the first quarter of 2003.