Goodyear Throws CEO Under the Bus After $31M Quarterly Loss (Board Orders a $2.55M Spare Tire)

Goodyear shareholders 🤝 New York Jets fans

“This time it's different.”

Well, ladies and gentlemen gentlecars, it appears the wheels have officially come off at Goodyear.

After nearly three years of trying to turn the Michelin man’s biggest arch rival into something resembling a profitable business, CEO Mark Stewart has officially been promoted to pedestrian.

Effective immediately.

Understandably, somewhere between the $31 million quarterly loss and the stock trading for the price of a McChicken, Goodyear's board decided it had seen enough. 

Turns out the only thing Goodyear managed to successfully rotate this quarter was its CEO.

Goodyear Tire & Rubber announced Monday that Stewart is stepping down as CEO, president, and board member, with director Roger Wood taking over as interim chief executive.

And Mr. Market responded by sending shares down 4% immediately, with the stock hovering around $4.20.

That's right. Four dollars and twenty cents.

You can ALMOST buy an entire share of this 128-year-old American institution for the same price as a gallon of gas (courtesy of Donnie Politics).

Stewart arrived in January 2024 like Tom Cruise accepting his next Mission: Impossible assignment.

Your mission, should you choose to accept it: Make Goodyear profitable again.

The plan was simple enough. Cut costs. Sell off the dead weight. Streamline operations. Get operating margins to 10% by the end of 2025. 

Unfortunately, Goodyear missed the margin target, and judging by last week's earnings report, the entire turnaround plan is now dangling from a helicopter over the Grand Canyon. 

Specifically, Goodyear reported third-quarter revenue down 2.3% year over year, alongside an adjusted net loss of $31 MILLION.

Now, I'm no Warren Buffett, but if you're selling a product that 280 million American vehicles literally cannot function without...

And you're STILL losing $31 million?

Yeah, I'd say a change behind the wheel was probably overdue.

Of course, Goodyear's problems go beyond one ugly earnings report.

Tariffs are driving up costs, raw materials are getting more expensive, and Chinese competitors are flooding the market with cheaper tires.

But don't worry, shareholders. The board has a plan.

Enter Roger Wood, a 64-year-old automotive veteran who's previously run Tenneco and Dana Holding.

According to regulatory filings, Wood will collect $310,000 PER MONTH, plus $1 MILLION in monthly stock awards for up to five months.

That's potentially $2.55 MILLION over five months, before housing, car, and travel allowances.

Goodyear: "We need to get our expenses under control."

Also Goodyear: "Does anybody know if Roger prefers a Mercedes or a BMW?"

Meanwhile, the board is searching for a permanent CEO while reviewing ways to cut costs, restructure operations, and improve profitability.

Which sounds fantastic.

Except that's exactly what the LAST turnaround plan was supposed to accomplish.

Nonetheless, maybe Goodyear can pull it off. After all, the New York Jets have been replacing coaches and promising a fresh start for years, and look how wonderfully that's worked out. 

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.