Asia Pacific Goodyear Network Workshop August 8 – 9, 2005, Manila 1

1.History of Goodyear 1898founded by Frank & Charles Seiberling in Akron, Ohio, USA named after Charles Goodyear (inventor of the vulcanisation process) 1916world‘s largest tire maker 20 thies expanded amongst others into Australia and Indonesia (Dutch East Indies) and established its own rubber plantations in Sumatra 1935aquired tire maker KELLY-SPRINGFIELD 1937began producing tires made from synthetic rubber 1962first polyester tire cord 1967biasbelted tire 1986thwarthed takeover attempt by a British financier, Goodyear had to sell the non- tire businesses and borrow a lot of money 2

History of Goodyear 1990first money-losing year since the Depression. Lay-offs and plant closures followed. 1996acquired Polish tire maker T C DEBICA and a 60% stake of South African tire maker CONTRED. 1997formed an alliance with Japanese SUMITOMO RUBBER INDUSTRIES (Joint-Venture) 1999acquired SUMITOMO RUBBER INDUSTRIES‘ North America and European DUNLOP TIRE businesses % of the workforce were dismissed and other cost-cutting efforts were used to solve severe finance problems 2003once owned 10% of SUMITOMO RUBBER INDUSTRIES, Goodyear sold back most of the shares, now owns only 1% SUMITOMO 3

2. Current Figures #3 tire maker in the world, behind Bridgestone and Michelin Products: tires, automotive hoses, belts and industrial chemicals. 90 plants worldwide; 47 of them are tire plants and 42 of these are unionised Rubber plantations in Indonesia Record sales in 2004: Sales:18,370 mil.$ (54% outside the US included 7% from Asia Pacific) Sales Growth: 21.5 % Net income:114.8 mil. $ Employees:84,000 Employee Gr.:2.3 % 4

3. The Seven Strategic Drivers 1.Outstanding leadership 2.A lower cost structure 3.Cash is king intensity 4.A fully leveraged distribution network 5.Enhanced brand strength 6.Product leadership 7.Advantaged supply chain 5

4. Analysis of Goodyear StrengthsStrengths Goodyear and Dunlop brands are well recognized all over the world 5700 patents issued or granted around the world. Presence in most countries of the world, even the major world markets WeaknessWeakness Net losses in the past ( ) Decline in Western Europe OE tire market Poor Cash flows in the past OpportunitiesOpportunities Tie-up on the American OE tire market (e.g. VOLVO and MACK Truck) New Products (e.g. ASSURANCE tire family) The rapidly growing tire market in Eastern Europe ThreatsThreats Weak North American tire market 26 Litigation (e.g. Entran II) Increasing raw material costs: natural rubber +36% crude oil +25% based on the figures of 2003! 6

5. Shortage of natural rubber Source: Rubber & Plastic News, July 11,

Shortage of natural rubber 1.In the past: decrease of natural rubber prices – 2.INTERNATIONAL TRIPARTITE RUBBER ORGANISATION (ITRO), August 2002 was founded 3.ITRO-member states: Thailand, Malaysia and Indonesia (70% of the world NR production) 4.The tire industry consume more than 70% of the natural rubber production 5.Great increase of natural rubber prices from 2003 to 2004; between 16% and 20% 6.Demand on rubber is increasing stronger than the production 7.In 2010 the demand will be at 9.6 mil metric tons – 300,000 tons more than it will be produced. This problem will not end before 2020 (forecast IRSG). 8

Shortage of natural rubber What are the solutions of the companies? Bridgestone/Firestone owns the world largest rubber plantation in Liberia. It produces only a small percentage of BFS needs. Goodyear reduces the part of NR about 8% in the tire without losing performance. The Colorado States University and the Ohio States University are working on genetically engineering of Rubber trees to produce more and better Latex. Research on SR to substitue NR Using nanotechnology to get the same performance with less NR and to produce leighter tires 9

6. Run-Flat Tires The future of the tire making industry ! Goodyear named their run-flat tire EMT (= Extended Mobility Tire) You can drive without air in the tire between 80 and 200 km by normal highway speed. No need to change the tire in dark, suspicious and hazardous areas No need for a spare wheel; cars getting lighter and need less fuel 10

7. Goodyear in Asia Pacific CountryLocationProducts AustraliaBayswaterConveyor belts MelbourneAero retread SommertonTires (50:50 jv) ChinaDalianTires QindaoHose products IndiaAurangabadTires BallabgarhTires IndonesiaAek Tarum EstateRubber plantation BogorTires Dolok Merangir EstateRubber plantation JapanTatsunoTires MalaysiaKuala LumpurTires New ZealandUpper HutTires (50:50 jv) PhilippinesLas PinasTires SingaporeSingaporeNR purchasing, R&D TaiwanTaipeiTires ThailandBangkokTires 11

Goodyear in Asia Pacific Importent developments in the region Since 97 the tire imports into the US have raised to double and the jobs have declined more than 21%. The main reason for that is the tire exports out of China High increasing rate of population in Asia and the rise of living standards in main countries, like China, India or Pakistan will push the demand on tires from the consumers side. Goodyear forecast: car sales in China will rise by 12 % this year Goodyear invest 18 mil$ in its Dalian (China) plant to produce run-flat tires Goodyear purchase now 1% of its need in China it will increase to 10% by % of the Goodyear-Dalian production goes into the export / Agreement with the USW accept this as long as US plants are operating at a „significantly full level“. In some years Dalian plant will only produce for the domestic market. 12

8. Goodyear engaged in Union-Busting in Thailand ICEM calls for reinstatement of fired PCFT branch chairman The ICEM is sharply critical of labour practices being carried out by Goodyear Thailand Ltd.. Local management at the 600-worker factory in Bangkok has systematically denied basic trade union rights to members and officers of ICEM affiliate Petroleum and Chemical Workers' Federation of Thailand (PCFT). In March, managers fired the chairman of the Goodyear Thailand branch of the PCFT, Anan Pol-ung, for merely carrying out his lawful responsibilities in attempting to achieve social benefits for workers in the factory's rubber stock division. In a letter to Goodyear‘s Thai management, ICEM General Secretary Fred Higgs said, „Preventing a trade union leader‘s right to recruit and organise in the workplace is a gross violation of international standards on labour and human rights. We intend to take this injustice and ensure that Goodyear is linked to a serious labour human rights infraction throughout the world.“ 13