Using momentum coming out of the economic recession, Goodyear Tire & Rubber (GT) said on Tuesday it is targeting record earnings in fiscal 2013.
The top U.S. tire maker said it is aiming for an operating profit in its North American Tire unit of $450 million, as well as improved segment income in its international businesses, making for record income of $1.6 billion.
Goodyear CEO Richard Kramer said the company is positioned to “confidently drive higher levels of performance across” its businesses utilizing momentum gained when emerging from the recession as well as megatrends over the next decade that he said will favor the company.
The Akron, Ohio-based company expects to make capital investments of between $1.1 billion and $1.3 billion in 2012 and 2013, which would be slightly higher than an anticipated $1.1 billion to $1.2 billion in 2011. Of those funds, about $500 million to $600 million will be allocated toward projects such as plant modernizations, expansions and new construction, helping to meet an estimated 3% to 5% annual increase in unit volume.
Goodyear, which said it has a “clear view” of its destination as a business and well-defined strategies, expects to reduce its underfunded pension obligations to $1.2 billion, or by more than half, by 2013.
Pension contributions of $550 million and $525 million will be made in 2012 and 2013, respectively, on top of $275 million in contributions in the current year, the company said. The move, Goodyear estimates, could cut its pension expense by $100 million a year.