1 9 9 8 A N N U A L R E P O R T ONE REVOLUTION AHEAD 1998 FINANCIAL HIGHLIGHTS Dollars in millions, except per share Year Ended December 31, 1998 1997 NET SALES $12,626.3 $13,065.3 INCOME FROM CONTINUING OPERATIONS – PER DILUTED SHARE NET INCOME – PER DILUTED SHARE ASSETS DEBT EQUITY 717.0 4.53 682.3 4.31 $10,589.3 1,975.8 3,745.8 522.4 3.30 558.7 3.53 $ 9,917.4 1,351.2 3,395.5 DEBT TO DEBT AND EQUITY 34.5 % 28.5 % CASH DIVIDENDS PER SHARE COMMON SHARES OUTSTANDING SHAREHOLDERS OF RECORD AVERAGE NUMBER OF ASSOCIATES $ 1.20 155,943,535 28,348 96,950 $ 1.14 156,588,783 29,198 95,472 THE NEXT GENERATION ONE REVOLUTION AHEAD TO OUR SHAREHOLDERS FINANCIAL CONTENTS MANAGEMENT’S DISCUSSION AND ANALYSIS BOARD OF DIRECTORS AND OFFICERS GOODYEAR WORLDWIDE 1 4 14 21 22 59 60 SHAREHOLDER INFORMATION INSIDE BACK COVER The models in this report are children of Goodyear associates. They are listed in order of appearance: Lindsey Domokur, Marlia Fontaine, Troy John Geer, Michelle Lea Queer, Edward Nguyen, Heather Appleby and Matthew Appleby. Cover Tire: Goodyear Extended Mobility Technology (EMT) run-flat concept tire Cover Concept vehicle: Ford GT 90 WHAT WILL THE NEXT GENERATION OF DRIVERS LOOK FOR IN THE NEXT GENERATION OF GOODYEAR? How will we satisfy the demands of the most technologically savvy, mobile bunch of people ever to own wheels? By jumping in the fast lane to reinvent our products, our marketing, our presence, our company. With intelligent tires that think for themselves. Computer imaging, virtual reality and myriad other technologies that assist in developing and testing designs and materials, raising tire I.Q. and streamlining the development and manufacturing processes. By providing a diverse, flexible workplace to attract and retain top-quality associates. By continuing to build our global presence—moving in the fast lane to keep Goodyear One Revolution Ahead. 100TH ANNUAL REPORT HOME OFFICE: AKRON, OHIO 44316-0001 G O O D Y E A R TO OUR SHAREHOLDERS: Tire unit sales worldwide surpassed 1997 levels as higher replacement sales in Europe and North America more than offset lower original equipment sales in Asia and Latin America, although dollar sales were disappointing in part due to currency translation and oodyear’s 100th year defined our ability to deal competitive pricing. swiftly with unanticipated economic adversity However, we continued to reposition the company for while aggressively positioning the company future profitable growth in this more challenging, volatile for profitable growth and industry leadership. and competitive global economy. We sold the All American G We are a century old and 100 years young, and around Pipeline and related Celeron companies, as well as other us, one millennium gives way to the next. Our history non-core Engineered Products businesses and extraneous gives way to our future. real estate. As Fortune Magazine’s Most Admired Company in Other measures also were taken to implement our the rubber and plastics industry and one of the most strategic plan—all dedicated to honing our leadership in admired in the“engineering”sector of the Financial areas that will yield a sustainable competitive advantage Times/PricewaterhouseCoopers“World’s Most Respected today and into the next millennium. Clearly, we must be Companies” survey, we intend to lead the tire and rubber One Revolution Ahead in the eyes of all our constituencies industry into the next millennium. and in our industry if we are to meet our ambitious goals To that end, 1998 brought mixed results. to be the industry’s best and biggest. While we managed well many aspects of an undeniably To be One Revolution Ahead signifies an uncompro- difficult year, we were disappointed that some of our mising commitment to technology, cost and quality that results were not as strong as we had anticipated. Several brings products to the market for a new generation of factors contributed, including macroeconomic turmoil, technically sophisticated drivers…adapting rapidly to competitive pricing pressures in several regions and economic conditions to deliver financial results and currency translation. reward our shareholders…making strategic investments Nonetheless, we delivered respectable financial results in growth…and developing and empowering a diverse when almost one-third of our earnings historically have workforce capable of leading the industry. come from regions of the world now battling recession. Income from continuing operations surpassed 1997’s level, and comparable diluted earnings per share of $4.53 compared favorably with 1997’s $3.30. INDUSTRY LEADERSHIP AND CONSOLIDATION A major global alliance with Sumitomo Rubber Industries/ Dunlop was announced in February, which will restore Goodyear as the world’s largest tire company and recapture the top position in the tire industry. Foundations 2 G O O D Y E A R for this partnership were established in the offtake and > Last but not least, this transaction, which is accretive test-marketing programs reached in 1997 and 1998. from the day it goes into effect, has been designed The alliance provides a unique opportunity for Goodyear to preserve the strength of our balance sheet and and SRI/Dunlop to build on our individual and collective Goodyear’s financial flexibility for future growth: strengths to provide customers worldwide with a deeper, Earnings per share will increase the day the venture broader level of high quality, cost effective tire products goes into effect, and our debt to debt plus equity will grounded in world-class technology and a range of remain around the 40 percent level by the end of 1999 services, only available through our combined strengths. and is expected to return to just more than 30 percent The benefits of this landmark agreement are substantial: by the end of 2000. > Goodyear’s annual top-line sales will grow by approx- The agreement establishes four business and two imately $2.5 billion, about 20 percent; functional joint ventures. Goodyear will own 75 percent > In global market share, sales of approximately of SRI/Dunlop’s North American tire operations, which 22 percent will make Goodyear the tire industry leader; will remain separate from our existing North American > In the U.S. replacement market, we will extend our Tire business unit. A European joint venture, in which North American leadership, adding $800 million in we also hold a 75 percent interest, will include tire assets annual sales; and operations owned by both companies but will not > Our total annual sales in Europe will approach $5 billion, include our European chemical division, mold, steel and putting Goodyear in a strong number two position in fabric facilities or tire operations in Poland, Slovenia, that market; Turkey, Morocco and South Africa. > Through a much closer relationship with the major In Japan, Goodyear will establish a stronger foothold Japanese original equipment accounts, our goal is to through two sales joint ventures, one for OE and one significantly increase our OE share and our replace- for replacement tires, which will be 25 percent owned ment share in Japan by the year 2005; by Goodyear. > Rights to the Dunlop brand in the United States, The difference between the value of the respective Canada, Mexico and Europe will enrich our marketing businesses being consolidated will be settled through position by providing a highly regarded second brand a balancing cash payment of approximately $936 million to effectively compete with our competitors’ entries; paid by Goodyear to SRI. And, separately, Goodyear will > Over the next three years, Goodyear expects to realize acquire a 10 percent interest in SRI and SRI will acquire substantial synergies, yielding cost savings of $300 an equivalent dollar value of Goodyear shares. million to $360 million; and Concept vehicle: Pontiac GTO In addition, two support service joint ventures will be formed, involving technology sharing, which will be 51 percent Goodyear-owned, and global purchasing, where Goodyear will own an 80 percent stake. G O O D Y E A R 3 t t t t t t t t ”We intend to lead the tire and rubber industry into the next millennium.“ GLOBALIZATION AND GROWTH The close of 1998 found the tire industry challenged by the world’s economic environment, and we succeeded in gaining greater flexibility in offsetting unanticipated negative events. We’ve strengthened our distribution in the U.S. with Our ascent to the top is resulting from a total team investments in several major tire and service dealerships effort —a world-class performance by a dedicated, and extended our retread capabilities. focused, global team. Its achievement will mark a crucial In Luxembourg, a major expansion of our Technical step in our Mission Into the 21st Century, a strategy Center is underway. Rationalization, modernization and focused on leadership aimed at: expansion is completed, progressing or planned for all > Becoming the industry leader as the best tire and rubber major units in Luxembourg. company in the world; An Engineered Products Conveyor Belting Technical > Achieving a leadership position in all markets; Center was completed to support development of new > Fast, profitable growth in our core businesses; and products, a calender was added in Uitenhage, South > Becoming the low-cost producer of the world’s Africa, to increase capacity, and a new power transmis- top-tier rubber companies. sion automotive and industrial belt plant in Chihuahua, Simultaneous with our landmark SRI/Dunlop alliance, Mexico, will begin production by mid-1999. we added depth, flexibility, new markets and shareholder Final-finish and component preparation equipment value through equity increases in all regions. During 1998, was added at Union City, Tennessee, as the first step more than $300 million was invested to establish a control- in a $60 million investment, and $40 million is allocated ling interest in Slovenia and increase our equity position to modernize and increase medium radial truck tire in The Philippines, Poland, Turkey, Guatemala, Sumatra production in Topeka, Kansas, and Danville, Virginia. and Thailand, and we assumed full ownership of Contred A $35 million polymer expansion in Beaumont, Texas, in South Africa, and Brad Ragan in the United States. has added capacity for Natsyn, a synthetic natural An agreement also was reached to purchase the rubber replacement. remaining half of South Asia Tyres Ltd., a joint venture In Latin America and the Caribbean, we increased with RPG’s Ceat Tyre subsidiary in India. our OE sales support in Uruguay, Paraguay, Bolivia Concurrent with an investment to strengthen Nippon and Ecuador. Giant Tire in the global earthmover and over-the-road Final approval was given to link Goodyear and T&WA markets, we gained a controlling interest in that joint of Louisville, Kentucky, a minority-owned OE component venture with Toyo Tire & Rubber Company by acquiring supplier in which Goodyear becomes a partner. T&WA 15 percent formerly held by Mitsubishi. produces mounted/balanced tire and wheel units, 4 G O O D Y E A R t t t t sequences completed assemblies and delivers just in time to automotive customers. Expansion of North American Tire’s distribution base continues with more outlets, increased market share in new distribution channels and product line offerings. Wal-Mart expanded Goodyear sales through 439 Sam’s Club locations, and Penske Auto Centers signed a long- ”Staying One Revolution Ahead means massive commitments to product and process technology.“ term agreement for 800 outlets through 2005. supply chain. Kelly’s Technical Center operations also In Germany, the Premio automotive retail network will be transferred to Akron on a different schedule. now offers Goodyear products. In aviation tires, we are outfitting the Federal Express New, efficient warehouse and distribution facilities jet aircraft fleet, strengthening a supply relationship for were completed or under construction in Luxembourg, FedEx’s truck fleet with OE, replacement and retreaded Germany and Turkey. tires; supplying Emery Worldwide’s jet fleet with new and In North America, Logistics and Product Supply will retreaded tires; and extending the contract to outfit integrate 33 logistics centers into 18 future locations and Southwest Airline’s aircraft with OE, replacement and improve customer service. The new Obetz, Ohio, location retreaded tires. opened in 1998, and construction continues on three other facilities. The integration of Kelly-Springfield into North American Tire continues with Kelly’s Cumberland, Maryland, offices closing by mid-1999. Efficiencies and product rational- ization will eliminate expensive duplication across the PRODUCT TECHNOLOGY AND QUALITY EMT (Extended Mobility Technology) run-flat tires have captured the attention of OE customers worldwide with approvals by General Motors, DiamlerChrysler and most recently BMW, and testing is underway by Alpha Romeo, Lexus and Toyota. Run-flat technology also is garnering awards worldwide, including the prestigious 1998 Automobile Association Award for road safety features in the United Kingdom. Investments continue in Ultra-Tensile Steel, the strong- est tire reinforcement material. This strong micro alloy meets demanding high-performance tire requirements and led to run-flat technology for OE and replacement tires, which eventually will eliminate the spare in 75 percent of all vehicles. Innovative new products remain a competitive advantage. G O O D Y E A R 5 In Poland, a new truck tire plant at T.C. Debica, where During the year, many upgrades to major manufacturing Goodyear owns a 60 percent share, started production facilities are incorporating aspects of our IMPACT process of radial steel/steel truck tires, increasing the plant’s technology, Goodyear’s flexible, cellular manufacturing competitiveness. process that takes tire-manufacturing technology into the Development and manufacturing will accelerate next millennium. New quality, cost and flexibility standards product introductions in the next three years, when more have been set while exceeding the quality of tires made than 20 new passenger and light truck tire lines will be with any other process. introduced to grow business and increase profitability. IMPACT, the Integrated Manufacturing Precision By the end of 2000, 80 percent of our lines will be less Assembled Cellular Technology, is faster and more precise than three years old. than today’s production process and cuts in-process A four-tire North American new product launch inventory and related equipment in half, compared to kicked off 1998; European consumers were introduced traditional tire manufacturing. to a new winter EMT tire; and the largest simultaneous We took advantage of economies of scale, resulting tire introduction in Europe took place, featuring nine in cost and quality improvements in our products. lines of commercial tires. Rationalization enabled us to exploit the strengths of each New products were rolled out globally for agricultural region and manufacturing facility, narrowing the range of and commercial trucking applications, and in Latin their production and satisfying demand for high-quality America a regional launch introduced the new Quantum products in the competitive world marketplace. truck tire line. Four North American Tire plants began seven-day, Customer-driven engineered products and services continuous operations to improve efficiencies and increase also are speeding from development to the marketplace. production through low cost, incremental capacity to meet To reduce development and test time by 60 percent for OE and replacement tire demand. heavy-duty conveyor belts, we acquired the industry’s We were successful in providing high-quality, low- largest splice-fatigue tester. Work also continues on cost products from Latin America and Asia to the North “intelligent” products that self-monitor and communicate American market, and we have converted our modern performance levels. U.S. plants to continuous seven-day operations. As com- PROCESS TECHNOLOGY AND PRODUCTIVITY Staying One Revolution Ahead means massive commit- ments to product and process technology. Since 1993, scientists at Goodyear and the U.S. Department of Energy’s petitive pressures in the global marketplace continued emphasizing the need to rationalize manufacturing to our most efficient locations, we announced plans to cease tire manufacturing at our Gadsden, Alabama, plant. Tire production in the facility will be permanently discontinued Sandia National Laboratories have collaborated on com- by the end of 1999. putational analysis tools in tire mechanics, materials and manufacturing to shorten product development time. 6 G O O D Y E A R Concept vehicle: Acura TL-X With Sava, Engineered Products gained its first manu- individual initiative in pursuit of process improvement, facturing site on the European continent and can more exceeding customers’ expectations and utilizing data to readily participate in the $4 billion global engineered- make quality decisions. The Associate Planning Process products market. recognizes that we need to simultaneously meet the Sava strengthens our overall position in Central business needs identified in our strategic business plans Europe and provides a low-cost supply base to provide and the growth needs of our associates. The process broad-market tires in Western Europe. ensures alignment and consistency between the com- Half of our product costs are raw materials, and we pany’s long-range objectives and each individual’s daily started a Preferred Supplier Quality award program, activities by articulating a clear vision of the future that recognizing suppliers for measured, consistent quality. can be readily achieved by all associates. Purchasing also inaugurated a cost/quality program Concurrent with the introduction of the Associate called Value Quest, involving 50 raw material suppliers Planning Process, our global Business Conduct Manual providing $3 billion in materials annually. was prepared and distributed. The manual supports our Quality offers a powerful competitive advantage, core values, philosophy and policies because we believe and facilities in all regions continued earning QS and that company policy should impose obligations that often ISO quality certifications. go beyond the requirements of local law. PEOPLE DEVELOPMENT AND EDUCATION Last year I reaffirmed our values—protecting our good name, focusing on customers, respecting and developing our people, and rewarding investors. These values are We now are positioned to deliver results as the number one or two player in each of our major markets. We are currently engaged in an extremely intense battle for market leadership around the world. We intend to take our newly restored industry leadership position the core of our strengths and strategies and address all and extend that win: of our relationships with customers, associates and shareholders. To prevail in the future requires harnessing every associate’s imagination and energy and a mind-set that invites, encourages and requires participation in iden- tifying and solving challenges to improve our products, processes and technologies. We are designing and implementing processes that create and maintain an environment to naturally enable all associates to reach their full potential. To this end, our Associate Planning Process is a global catalyst extending our competitive advantage, promoting > To do it profitably, responsibly and quickly. > To do it in collaboration with our partners, our associates, our shareholders and our customers. > To do it in every one of our businesses. It is how we have become—and how we intend to stay —One Revolution Ahead. Respectfully submitted, Samir G. Gibara Chairman, Chief Executive Officer and President G O O D Y E A R 7 t t t WHAT WILL THE NEXT GENERATION OF DRIVERS LOOK FOR IN THE NEXT GENERATION OF GOODYEAR? ”Smart tires that never go flat and self-adjust to road conditions...that tell you when you’re pushing your luck in a curve and when they need to be changed.“ ”A company that leads the industry worldwide through strategic acquisition and growth.“ ”A progressive employer that appreciates workforce diversity.“ ”A good, solid investment.“ ”A company that cares about the environment as much as I do.“ 8 G O O D Y E A R Goodyear’s vision and the company’s indomitable spirit are focused on the challenges and opportunities of the next generation of customers, shareholders and associates. We are anticipating their needs and honing the technical and marketing expertise to exceed their expectations…A global leader with innovative products and services that deliver…A progressive, learning work- place that sharpens our competitive advantage…Sound financial practices and a strategy to enhance shareholder value…Socially and environmentally responsible. Not just for today, but for the next generation, their children, their grandchildren, their great- grandchildren, and so on. Building momentum for continued success to remain One Revolution Ahead. G O O D Y E A R 9 Pulse and continuous lasers are applied to a rolling tire in the analyses of structural vibrations and structure-borne noise radiation. These techniques also are used to perform shock wave analysis and aid structural optimization of tire composite materials. Original equipment Wrangler RT/S tires destined for sport utility vehicles spiral down the conveyor at the Napanee tire plant in Ontario, Canada. Concept vehicle: Ford GT 90 1 0 G O O D Y E A R t t GOODYEAR: ONE REVOLUTION AHEAD... It is a powerful competitive advantage accented by Goodyear’s technological edge, its market research, and the ability to develop and test designs and materials, products and processes. Technical excellence developed in-house, at our worldwide tire and Engineered Product t takes vision, commitment and performance to Technical Centers and in cooperation with Sandia achieve Goodyear’s ambitious Mission Into the National Laboratories. 21st Century. Identifying and leveraging sustainable It is an infusion of energy, enthusiasm and creative competitive advantage. Delivering results. Staying genius brought by 200 new scientists and engineers in ahead of the competition. Keeping focused. Ahead of a 12-month period. I our competitors to anticipate, meet and exceed the Maybe that’s why Goodyear has earned more original expectations of our customers, shareholders and the equipment approvals over the years than any other people who make Goodyear successful—our associates. brand, including 49 car and light truck tire approvals in It’s all about staying One Revolution Ahead. 1998 alone. And why Goodyear concept tires appear on Physical, financial and human resources are chan- leading-edge design concept cars crafted by the world’s neled toward that goal. Massive commitments to product prestigious auto companies at all of the industry’s leading and process technology have positioned the company auto shows. for unprecedented growth over the next five years. Innovative transportation to meet the imaginations It is setting new standards—for quality, technology, of the next Goodyear generation. performance and innovation—and anticipating customers’ desires before they know what they are. Applying Goodyear’s technological edge: IMPACT… EMT…Ultra-Tensile Steel…Experimenting with break- through designs and materials. ”...with tires that perform, going from 0 to 60 or 60 to 0 without a squeal and without ever going flat.“ G O O D Y E A R 1 1 A GLOBAL PLAYER... W hen Goodyear and SRI/Dunlop announced in February their intent to join forces, the die was cast for Goodyear to regain its leadership as the largest tire company in the global competitive arena. And both partners win. With 80 plants in 33 countries. With products Gaining a foothold in the formerly impenetrable Japanese distributed virtually around the world. With marketing market for Goodyear—capitalizing on the Dunlop brand operations in 185 countries, and overhead, the world’s in Europe, North America and Mexico—building a port- largest blimp fleet, now in Europe, North and South folio of brand strength for Goodyear’s distribution network. America and soon, Asia…all to help build preference Opening new doors to growth in its most mature markets for the Goodyear brand. On the World Wide Web. with less reliance on growth in more unpredictable So wherever their wandering feet may take them, emerging markets and seizing opportunities to change Goodyear is there. In the sky, on the race track and its overall cost structure. highways, in coal shafts and copper mines. Staying ahead of the pack worldwide, and being where Ready to meet the demands of the next generation and when customers want the company to be with a pro- of customers with tires, engineered products and duct assortment for today and tomorrow. chemicals—the most technically savvy group to ever From the upscale hypermarkets, Premio and Hi-Q navigate the world—on-road or off, electronically marketing formats in Europe to Serviteca and Solo Llantas or behind the wheel. Just like Goodyear. in Latin America to Asia’s Sertaservis, Max Pro and Tyre Pro to Goodyear Auto Service Centers, JustTires and the strongest dealer network in the business throughout North America— more than 70,000 locations spanning the globe to serve customers. A growing family, soon to be joined by SRI/Dunlop retailers. ”...with operations every- place in the world where I might eventually go.“ 1 2 G O O D Y E A R Sumitomo Rubber Industries President Naoto Saito (left) joined Goodyear Chairman Sam Gibara in New York to sign an agreement globally linking the companies for leadership into the next millennium. Goodyear’s distinctive Eagle performance tire logo touts the availability of Goodyear products at a retail store in Hong Kong. Technicians at the materials test laboratory of the Sava tire plant in Kranj, Slovenia, study the physical properties of compounds. Sava provides a low-cost supply base to provide broad-market tires in Western Europe. Concept vehicle: VW Beetle RSI G O O D Y E A R 1 3 t t t The most technically advanced engineering design and analysis software enables engineers to streamline the design process from a trial-and-error approach to a simulation method for perfecting designs, potentially doubling their productivity. Training and use of this tool provides a differentiating competitive advantage in manu- facturing process technology. A brightly redesigned tire wall and knowledgeable professional sales staff greet customers in Goodyear’s North American retail stores. Concept vehicle: Oldsmobile Recon 1 4 G O O D Y E A R t t A SUCCESS CATALYST... G oodyear is thriving…growing…and offering its associates unprecedented opportunities to succeed and contribute behaviors, attitudes and values. By understanding, respecting and learning from the Goodyear people. Leading, empowering, assisting and cultural differences, social attitudes, customs and values motivating from diverse backgrounds to maximize for a hundred years. By contributing to an environment individual and collective productivity. in which all associates work together toward common Sharing in the company’s success…learning from its goals and objectives. failures…realizing their full potential. Behind the company’s growth and performance are Opportunities for technical and personal development its people—recruited from every continent and afforded abound—joint development and exchange opportunities every opportunity to grow. Supported through family- with cross functional and international assignments and friendly policies and expanded telecommuting and projects with external partners, enabling full utilization work-at-home processes. Liberal tuition reimbursement of existing facilities and personnel. Five years and count- and global training programs. Emphasis on organizational ing with the U.S. Department of Energy’s Sandia National and cultural change, process improvement, Laboratories on computational analysis tools in tire work redesign and diversity. Training, mechanics, materials and manufacturing, fine-tuning succession and strategic direction. the manufacturing process…computer hardware and ”...offering employment opportunities that enable me to reach my full potential.“ software, including mainframes and microprocessors …finite element modeling, engineering trend analysis, holography, race-car leveling. All building on the core values that have served the company so well in its first century, and providing a catalyst to thrive in the next millennium. To melding the technological opportunities with the human side. All geared to stimulating inquisitiveness and embracing new ideas and ways of doing things to keep Goodyear adapting to the needs, desires and expectations of the consumers, today and for generations to come. G O O D Y E A R 1 5 A GROWTH ADVOCATE... G oodyear is on target…despite economic difficulties in Asia and Latin America, currency translation or pricing pressures…with a strong balance sheet…a high degree of flexibility… a viable strategic plan. global resources to compete throughout the world. With a proven strategic plan built on sound business Fluid and flexible. practices. Moving high-quality products from low-cost plants Taking immediate measures for future improvements. to satisfy demand in other regions to keep its plants Addressing short-term challenges and meeting share- humming…Identifying and eliminating uncompetitive holders’ expectations. Developing, implementing, facilities and excess capacity…Capitalizing on trade measuring and communicating strategic programs for agreements…Concentrating on core businesses. long-term sales and earnings growth. Globally savvy and uniformly aggressive. A global entity well positioned to face regional Working alone or in partnership—doing what uncertainties with a proven production rationalization makes sense. strategy enabling the company to take advantage of With stock traded on four major exchanges worldwide. With the potential to increase shareholder value to meet the expectations of our investors, as well as the next generation of shareholders. ”...providing shareholder value that lets me retire before I’m 50.“ 1 6 G O O D Y E A R Within the controlled environment of the McKinley Climatic Laboratory at Eglin Air Force Base in Florida, Goodyear engineers re-create winter driving conditions to test its winter and all-season tires, as well as competitors’ offerings. One customer service Engineered Products sales representatives per- form is conducting conveyor belt field tests to calculate belt cover hardness. Exhaust stacks are protected by paint, formulated with Goodyear Chemical’s Pliotec LS resin (shown here in beakers) for improved water- and chemical-resistance. Concept vehicle: Chrysler PT Cruiser G O O D Y E A R 1 7 t t t Five trucks navigate a steep descent near Larochette in Luxembourg on tires introduced this spring at the largest simulta- neous new product roll-out ever held in Europe, when nine full truck tire lines were launched. Clean, energy-efficient co- generation facilities, such as this one in Luxembourg, are trimming Goodyear’s energy costs through the simultaneous production of electricity or mechanical power and usable energy, such as steam or hot air. Concept vehicle: Pininfarina Eta Beta 1 8 G O O D Y E A R t t A SOLID CITIZEN... G oodyear is dedicated to being a socially responsible corporate citizen committed to environmental and civic improvements. Protect- ing and preserving the ecological balance and adhering to the highest standards of ethics and integrity. Socially, sponsoring Conservation Awards Programs for Looking for environmentally sound new ways to more than half a century, honoring truck-driving Highway operate…like developing a means of using modified corn Heroes for their altruism and professionalism, supporting and potato starch as a cost-effective renewable alterna- local United Ways with nearly $5 million annually, building tive to carbon black and/or silica in rubber compounds, Habitat for Humanity houses and the company and its and in the process, lowered rolling resistance, improving associates helping the American Red Cross cope with wet traction and maintaining treadwear. an unusual year of natural disasters globally. Or using energy-efficient, clean cogeneration facilities Because Goodyear can exist, thrive and grow, and it to help supply energy at manufacturing facilities in wants the environment to do the same. ”...in social responsibility and taking care of the environment.“ Izmit and Adapazari, Turkey; Wolverhampton, England; Colmar-Berg, Luxembourg; and Freeport, Illinois. Making significant progress on air and water purifica- tion efforts, waste reduction at all facilities worldwide, tire recycling advances and overall energy-use reduction. Finding ways to make its products last longer— improving the retreadability of truck tire casings, keeping them on the road and out of the waste stream; developing products that last longer and perform better; reducing rolling resistance to improve the fuel economy of the transport vehicles customers use. Taking the lead on scrap-tire disposal…championing tire-derived fuels and advocating immediate recycling/ recovery through viable, non-subsidized markets. At Goodyear Auto Service Centers, recycling the motor oil, coolant and freon—keeping them in use and out of the environment. Even recycling the fluorescent lights, copier toner cartridges and paper used at its office and manufacturing sites. G O O D Y E A R 1 9 THE FUTURE TODAY... G oodyear—positioned for today, tomorrow and the next millennium. An evolving enterprise poised to lead the industry—setting new standards, growing, thriving and fighting to be the most competitive in the industry. Preparing to recapture global lead- ership. Committed to being the best. With attainable five-year objectives: Gaining market share and growing sales…Becoming a $20 billion com- pany in revenues…Reducing SAG expense…Increasing return on sales…Maintaining the ratio of debt Scientists set up a rocket- to debt plus equity…Maintaining capital expenditures…Adhering to a dividend payout policy. Committed to quality as the engine that powers its drive to beat the competition. But most of all, staying One Revolution Ahead. propelled tire test at the U.S. Department of Energy’s Sandia National Laboratories where high-speed performance data is recorded through a glass plate on the sled track. An Extended Mobility Technology (EMT) tire mold is thoroughly inspected before being released to Lawton, Oklahoma, for production. New Goodyear Ventura passenger tires provide a quiet, comfortable ride even on the most challenging pavement, such as the cobblestone road to the castle at Bourglinster. Concept vehicle: Jeep Dakar 2 0 G O O D Y E A R t t t SHAREHOLDER INFORMATION Transfer Agent and Registrar First Chicago Trust Company of New York, a division of EquiServe P.O. Box 2500 Jersey City, NJ 07303-2500 (800) 317-4445 Inquiries concerning the issuance or transfer of stock certificates, the status of dividend checks or share account information should be directed to the transfer agent at the above address or toll free number. Provide Social Security number, account number and Goodyear’s ID number, 5721. Principal Office The Goodyear Tire & Rubber Company 1144 East Market Street Akron, Ohio 44316-0001 (330) 796-2121 www.goodyear.com Special Accommodation Call (201) 222-4955 to reach First Chicago Trust Company of New York if you have a Telecommunications Device for the Deaf (TDD) screen. An Annual Report audio cassette tape for visually impaired shareholders is available by contacting Goodyear Investor Relations, (330) 796-8576. r e t s e h c o R , t y o H - e s a C i t n a v A : g n i t n i r P h g r u b s t t i P , . c n I E & D B : n g i s e D Stock Exchange Information The principal market for The Goodyear Tire & Rubber Company common stock is the New York Stock Exchange (symbol GT). The stock is also listed on the Chicago Stock Exchange and The Pacific Exchange. Goodyear Common Stock On February 16, 1999 there were 28,377 shareholders of record of Goodyear common stock. The closing price of Goodyear common stock on the NYSE composite transactions tape on February 16, 1999 was $47.50. Annual Report on Form 10-K The Company’s Annual Report to the Securities and Exchange Commission for 1998 on Form 10-K will be available in March 1999. A copy, including all financial statements, schedules and exhibits, may be obtained without charge by contacting: Investor Relations The Goodyear Tire & Rubber Company 1144 East Market Street Akron, Ohio 44316-0001 or calling our Financial Report Distribution Center at: (515) 263-6408 The DirectSERVICETM Investment Program First Chicago Trust Company of New York sponsors and administers a DirectSERVICE Investment Program for current shareholders and new investors in The Goodyear Tire & Rubber Company Common Stock. The program offers automatic dividend reinvestment and a variety of other services. A shareholder information brochure explaining the program may be obtained by contacting: The DirectSERVICE Investment Program – For Goodyear Shareholders c/o The First Chicago Trust Company of New York, a division of EquiServe P. O. Box 2598 Jersey City, NJ 07303-2598 (800) 317-4445 Environmental Report A report pertaining to Goodyear’s environmental policies and activities may be obtained by contacting Corporate Environmental Engineering, (330) 796-7377. This report is printed on recycled paper. AERIAL AMBASSADORS After doubling the fleet and complet- ing the largest expansion in the history of Goodyear’s airship program, the company’s distinctive blue, gold and silver blimps are gracing the skies of North America, Latin America and Europe. Above, Chairman Sam Gibara joins his wife, Salma, as she christens the new Stars & Stripes ship. Middle, the Spirit of Europe I & II pass over Tower Bridge in London and at left, the Spirit of the Americas floats above Corcovado Mountain in Brazil. The value resulting from blimp coverage of television sports and public events totaled $23 million in 1998; nearly 15,000 customers were treated to rides; and the world’s most recognized corporate icons appeared on the cover of Smithsonian, the prestigious magazine of the Smithsonian Institution. Goodyear, together with its U.S. and international subsidiaries, manufactures and markets tires for most applications. Goodyear also manufactures and sells several lines of belts, hose and other rubber products for the transportation industry and various industrial and consumer markets and rubber-related chemicals for various applications and provides auto repair and other services at retail and commercial outlets. Goodyear operates 80 plants in the United States and 32 other countries. CORPORATE HEADQUARTERS THE GOODYEAR TIRE & RUBBER COMPANY 1144 EAST MARKET STREET AKRON, OHIO 44316-0001 WWW.GOODYEAR.COM 700-862-928-662