Goodyear’s largest shareholder recommends changes to restore investor confidence

West Palm Beach, FL – Elliott Investment Management L.P. (“Elliott”), which manages funds that have an investment representing an approximately 10% economic interest in The Goodyear Rubber & Tire Company (NASDAQ: GT) (“Goodyear” or the “Company”), sent a letter and presentation to the Board of Directors of Goodyear. According to the letter, the purpose of the materials is to outline the right path forward to create value at Goodyear and realize its full potential.

Elliott is one of Goodyear’s largest investors because it has strong conviction in the significant value-creation opportunity achievable at the Company, the letter said. Despite the Company’s strong brand, leading market share and favorable industry tailwinds, Goodyear’s stock has meaningfully and consistently underperformed. The Company’s poor stock performance is a direct result of its significant margin erosion, suboptimal go-to-market strategy, and unfocused brand strategy, which have collectively led to a loss of investor confidence, according to the letter.

To deliver improved results and restore investor confidence in Goodyear, Elliott believes the Company must pursue the critical steps detailed in its Accelerating Goodyear plan, including:

Enhancing Leadership & Oversight: Appoint five new highly qualified independent directors to the Board to improve governance, bring about a cultural change and help restore confidence among investors.
Monetizing the Trapped Value of Goodyear’s Retail Platform: Explore ways to monetize Goodyear’s Company-owned store network, which Elliott believes is nearly worth Goodyear’s market capitalization given the multiples of auto aftermarket service businesses.
Initiating an Operational Review: Form an Operational Review Committee to develop an operational and margin improvement plan.
Elliott believes these steps will strengthen Goodyear’s financial position, bolster its competitiveness globally and create sustainable value, unlocking more than $21 per share in value for shareholders, an increase of 179% to its current share price. Elliott looks forward to engaging with the Board, along with fellow shareholders, as soon as possible.

Goodyear responded the following in a press release, “We value input from our shareholders and regularly engage with them. We are reviewing Elliott’s recommendations, and we intend to meet with them to discuss their views in more detail. Goodyear’s Board and management team have a strong track record of making value-enhancing strategic decisions on behalf of shareholders. We regularly review the Company’s strategic plan to ensure that Goodyear is best positioned to deliver strong, sustainable shareholder value. As part of our Strategy Roadmap, Goodyear continues to strengthen our leadership position in the global tire industry as we advance our connected business model and innovate for the future of mobility.”