DETROIT — Goodyear Tire & Rubber’s turnaround under CEO Mark Stewart is showing progress, but the company is still burning through cash as it restructures and pays down debt, according to CNBC’s visit to a revamped Detroit store and an interview with Stewart.
At the shop, dressed up with a fresh black facade and ‘Motor City’ lettering for the Woodward Dream Cruise, Stewart highlighted the strides made under the ‘Goodyear Forward’ plan. The program, launched in response to activist investor Elliott Investment Management’s 2023 stake, aims to reposition the 128-year-old tire maker as a premium brand and improve its financial health.
‘We have made so much progress,’ Stewart told CNBC, wearing a navy blue Goodyear technician shirt. ‘It was really to get our feet back on the ground towards being the iconic company that we always were.’
Cash flow remains a hurdle
Despite the upbeat tone, Goodyear’s finances tell a more complicated story. Capital expenditures totaled roughly $2 billion combined in 2024 and 2025, with expectations of $725 million this year. Debt remained above $7 billion at the end of the second quarter.
The company posted a net loss of $453 million through the first half of the year, with operating income of $131 million, a 1.6% margin. Stewart originally aimed for a 10% operating margin by the end of last year, but the fourth quarter came in at 8.5%. That double-digit target remains a goal.
‘We’re working on getting to that double-digit margin, and we’re working on meaningfully generating cash flow,’ Stewart said. ‘It’s been a long time since Goodyear’s done that. That we absolutely must do.’
Shares have fallen more than 50% since Stewart took the helm in January 2024, despite meeting many milestones. The stock closed Friday at $6.35, down 27% this year, with analysts rating it a hold and a price target of $7.60, per FactSet.
Headwinds and cost pressures
Stewart acknowledged significant external pressures, including tariffs, inflated raw material costs, and competition from cheaper Chinese imports. Goodyear’s raw material costs are expected to be roughly flat year over year, but a $200 million headwind looms in the second half, largely tied to higher commodity costs from Middle East conflict, according to the company and Wall Street analysts.
Argus analyst Bill Selesky, in an Aug. 17 note, listed slower demand, rising costs, higher capex, low-priced Asian imports, and trade legislation as challenges. ‘It hasn’t been easy for Goodyear,’ he said.
Stewart is steering into premium segments, selling off units like the Dunlop brand and planning to launch more than 1,600 new products this year, mostly in higher-end tiers. He dismissed competing on low-end tires, saying, ‘We are not going to compete against a $6 or $10 converted tire.’
Asia-Pacific is a bright spot, with second-quarter segment operating income of $63 million and a 12.7% operating margin. The U.S. operations, however, remain a drag. The company expects cash burn to continue into 2027, but the announced closure next year of a Fayetteville, North Carolina plant should improve Americas segment operating income by $270 million annually.
‘We had to take a very difficult decision, but a necessary one,’ Stewart said of the plant closure. ‘We just didn’t have a pathway to be competitive out of that facility.’
The Goodyear Forward plan, initially a two-year effort, has continued under Stewart, who said the next phase would be announced ‘at the right time.’ The plan has cut roughly $1.5 billion in annualized costs, according to the company.
Marketing is also a focus, with the iconic Goodyear blimps playing a starring role. Stewart described campaigns like ‘buy to fly,’ where retailers and consumers can win blimp rides, and highlighted a rare double-blimp appearance at the Detroit event. ‘We’ve always made the tires worth bragging about,’ he said. ‘We’re just reminding people now.’
Source: www.cnbc.com — https://www.cnbc.com/2026/08/29/goodyear-turnaround-cash-debt.html
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