The Goodyear Tire & Rubber Company GT
Goodyear's industry-low 5% margin and under-monetized 715-store retail platform create $32/share of value vs $11 today — via board refresh, retail sale, and operational review.
Thesis
Elliott argues Goodyear — the #1 US tire manufacturer with a 125-year brand and 21% replacement-volume share — has materially underperformed for a decade due to self-inflicted operational missteps, most notably the 2018 TireHub distribution JV that cost ~$400M in lost profit and widened the margin gap with Michelin and Bridgestone to ~700bps. Management has missed every long-term target since 2016 (falling ~70% short of the $3B segment operating income goal) and lowered margin guidance repeatedly. Elliott recommends three actions: refresh the board with five new independent directors, monetize the ~715 Company-owned retail stores (worth nearly the entire market cap at peer multiples), and launch an operational review to recapture 385bps of SG&A, go-to-market, and brand/SKU margin. Combined, these unlock $32/share — 179% upside from $11 — assuming no multiple expansion.
SCQA
Goodyear is the #1 North American tire manufacturer with 21% replacement share, the three largest NA plants, leading OE attach rates with GM/Stellantis/Ford/Tesla, and a 125-year brand — operating in a favorable high-value-added tire market.
Despite these advantages, Goodyear posts industry-low 5.1% operating margin — ~560bps below peers and widening — driven by a failed TireHub distribution JV, bloated SG&A, uncontrolled SKU proliferation, and an under-invested retail platform.
The Board should appoint five new independent directors with auto/operations expertise, sell the ~715 Company-owned retail stores to de-lever, and form an Operational Review Committee to recapture the 385bps margin gap.
Monetizing retail ($4/share) plus recapturing 385bps of margin ($16/share) yields a pro-forma share price of $32 — 179% upside from $11 — assuming no TEV/EBITDA multiple expansion.
The three reasons
- 1
Retail stores alone could be worth nearly Goodyear's entire market capitalization
- 2
Operating margin of 5.1% vs 10.7% peer average — gap has widened, not closed
- 3
CEO missed 2016 Investor Day $3B target by ~70%; margin promises repeatedly broken
Primary demands
- Appoint five new independent directors identified by Elliott with automotive and operational experience
- Monetize Goodyear's ~715 Company-owned consumer retail stores via sale to a focused, well-capitalized buyer
- Form an Operational Review Committee to close the margin gap vs. Michelin and Bridgestone
- Conduct a management review and consider leadership change
- Use retail sale proceeds to de-lever the balance sheet
KPIs cited
Pattern membership
Precedents cited
- Mavis Tire sale to BayPine (16.7x LTM EBITDA)
- Pep Boys acquisition by Icahn Enterprises (14.2x)
- Midas acquisition by TBC Corporation (13.0x)
- Driven Brands' acquisition of International Car Wash Group (2020)
Composition what's on the 41 slides
Slide gallery ·
Notes
Strong example of a fully-branded activist campaign — bespoke 'Accelerating Goodyear' wordmark (chevron arrow, Goodyear yellow-on-blue) with companion microsite AcceleratingGT.com. Cover features a Goodyear-liveried race car. SCQA structure is tight: Market Leader / Poor Performance / Accelerating Goodyear tri-column (p6) then four numbered grievances (p17). Rhetoric relies heavily on quoting CEO Kramer and former CFO Darren Wells verbatim to document repeatedly-broken margin promises (p29). Ex-employee and ex-competitor quotes reinforce operational critique. Elliott signals breadth of diligence (90+ former-employee interviews, ops consultant, customer surveys, shareholder survey). Stake (~10% / ~$1B, reported publicly the same day) is NOT disclosed inside the deck. All pages bear '10XEBITDA.com' watermark — indicates this copy was redistributed via a third-party repository.