Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Mon, Mar 16 1992 Date: Mon, 16 Mar 92 05:48:19 EST Message-ID: 03-16 0000 BONUS: Gault turns Goodyear around USA TODAY Update March 16, 1992 Source: USA TODAY:Gannett National Information Network Stanley Gault's eyes widen with excitement. He's looking at a just-finished model of the Goodyear blimp, which he redesigned shortly after taking the wheel of Goodyear Tire & Rubber 10 months ago. And he likes what he sees. "Goodyear. #1 in Tires." To live up to such a lofty self-billing, Gault, 66, has done more than put racing stripes on the blimp. The lifelong salesman, who previously revived rubber-products maker Rubbermaid after a golden career at General Electric, has been trying mightily to turn things around at stumbling Goodyear. By many accounts, he's well on his way. WHAT HAS GAULT DONE SINCE TAKING OVER AT GOODYEAR? Gault has already slashed costs, put assets on the block, rolled out new products and lifted morale. The final measure of Gault's success, however, will be how many tires he can sell, and he has many believers. Since Gault took over, Goodyear's stock has jumped 130%. Tonight, he'll be in New York to accept Financial World's award as Chief Executive Officer of the Year. HOW SUCCESSFULL IS GAULT AT TURNING COMPANIES AROUND? "Lucky Stanley," says Gerald Meyers, former chairman of American Motors, now a consultant. "Everything he touches turns golden." As a high-school freshman, Gault upset the reigning champion, a senior, to win a magazine subscription-selling contest. At GE, his sales prowess over 31 years almost landed him in the chairman's office. At Rubbermaid, just 35 miles away in Wooster, he turned a sleepy company into a rubber-products power, launching a stream of innovations, marketing aggressively and keeping costs low. Before he retired last May, revenue had risen to $1.5 billion from $340 million in 1980. WHAT HAPPENED AT GOODYEAR PRE-GAULT? Goodyear could use a replay. Before Gault rode into town, the company was still reeling from a nasty takeover attempt by James Goldsmith in 1986. To make Goldsmith go away, Goodyear bought his shares for $618 million and spent another $2 billion buying back other shares. That and other efforts to remain independent pushed Goodyear deep into debt, which hit $3.8 billion in 1990. Business also slowed, worsening in the recession. In 1990, Goodyear lost $38 million - its first loss since the Depression. WHAT IS GOODYEAR'S STRATEGY NOW? Goodyear is trying to return to its roots "by focusing the business on tires," says Stuart Williams, manager of Fidelity Retirement Growth Fund, which owns 250,000 Goodyear shares. "Focused businesses perform better these days." Gault stepped up the push to auction assets. He's also elevated an already severe cost-cutting program, aiming to slash costs by $350 million over three years. To make the point, he got rid of one of his two secretaries and yanked the light bulbs from seven lamps in his office. "I've got enough light in here," he says, motioning to the overheads. He wants to send a message: "We're going to save every penny we can." Such scrimping helped Goodyear pare its debt 29% to $2.7 billion by the end of last year. Gault wants that lower still. HOW DOES GAULT PLAN TO TURN GOODYEAR AROUND? To really turn Goodyear around, however, Gault will have to sell more tires, and that won't be easy with consumers smarting from the recession. Gault has rolled out four new tires hoping to boost sales, which dipped 3% to $9 billion last year. Gault is betting big on Goodyear's new Aquatreds, introduced during the Winter Olympics. He's counting on people to get rid of the tires that came with their cars and pay $400 a set for the new design, which prevents hydroplaning. "That's one of the scariest things a person can experience because the car momentarily is totally out of control," he says. He aims to sell 850,000 Aquatreds this year. IS GAULT DOING ANYTHING DIFFERENT? To sell more Goodyear tires in general, Gault is breaking with tradition by pushing beyond the company's 3,500 independent dealers - his gutsiest move to date. This month, he announced that Goodyear will sell seven lines of tires - but not the Aquatreds - to Sears, which will in turn market them through its 850 auto centers. "Of course, we're unhappy," says Atlanta dealer Bill Fullerton. "We don't want Goodyear selling tires through anyone but us." They'd rather not have to compete against a big-name retailing power. WHAT PROBLEM IS GAULT FACING? "He needs to broaden distribution," says Williams. "But it could backfire. The dealers could reduce their sales push on Goodyear tires by selling other brands." Says Richard Stewert, an Atlanta Goodyear dealer who owns a shop across the street from a Sears: Gault responds that most Sears customers aren't likely to venture into a Goodyear dealership anyway, so they won't really be competing. "Two million Goodyear tires a year are being replaced by tires bought at Sears. We're not getting a crack at that," he says. His prediction: Dealers' sales will actually rise as a result of more aggressive marketing efforts. HOW HAVE EMPLOYEES REACTED TO THE CHANGES? All the change has morale soaring at Goodyear headquarters. "It's like we're the Chicago Bulls and he's Michael Jordan," says Michael Whittman, a marketing manager. When Gault walks down the hall, he waves and nods to everyone in sight. "Hi. How ya doing? Hello," he says. Smiles surface as people respond with equal warmth. "We're all together in this," says Gault, who refers to his employees as associates if not by name. HOW WAS GAULT AS A YOUTH? Gault is well-known in these haunts. He was born in Wooster, Ohio, a quaint cross between an old-time industrial town and a campus village. From his earliest days, he was known as one tough competitor. Gault still recounts his upset victory in the subscription-sales contest with pride and a smile. Mostly, however, he remembers working. His father, one of the founders of what became Rubbermaid, lost nearly all his money when Gault was 10. "I did everything," says Gault - "played the piano for money, washed pots and pans, swept snow, scrubbed floors. We didn't have much." WHEN DID GAULT JOIN GE? Gault joined GE in 1948 as an appliance salesman after a stint in the Army and graduation from Wooster College. By 1978, he was running the company's industrial-products division and competing with Jack Welch to become the next chairman of GE. Welch won. So Gault took a job as chairman of Rubbermaid in 1980, returning home for good. HOW DID GAULT END UP AT GOODYEAR? A month into Gault's retirement last year, his good friend Tom Barrett, then the embattled chairman of Goodyear, asked him to take over. He agonized for a bit and discussed it with his wife before signing a three-year contract. And here his is, conjuring the magic one last time. After reviewing the model blimp and chatting briefly with a guest, he leaves with, what else, a sales pitch: "What kind of tires do you have? Uh huh. You should get some Goodyears. That way, I know you'll get home safe." Bonus Editor: Michele Coleman. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. 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