Goodyear survived by betting big on the radial tyre when rivals hesitated
In 1970 America had five big tyre makers, and only Goodyear was still independent in the new century. The difference came down to one expensive decision: tearing up factories built for old bias-ply tyres and retooling for radials, a gamble critics mocked at the time and later credited with saving the firm.
Frank Seiberling founded the company in Akron, Ohio, in 1898 and named it after Charles Goodyear, the inventor of vulcanised rubber. Early output included bicycle and carriage tyres, rubber horseshoe pads and even poker chips. Seiberling supplied Henry Ford with racing tyres in 1901, and in 1903 Paul Weeks Litchfield patented the first tubeless car tyre. Needing long-staple cotton to reinforce rubber, Litchfield bought 36,000 acres near Phoenix in 1916, land that became the towns of Goodyear and Litchfield Park.
The firm also took to the air. It built airships and balloons from the early 1900s, flew its first advertising blimp in 1925 and partnered with Germany's Zeppelin company from 1924 until the Second World War ended the arrangement in December 1940. During that war it built F4U Corsair fighters.
The radial decision came when Charles J. Pilliod Jr. became chief executive in 1974. Refitting the industry's plants was estimated at $600 million to $900 million, a huge sum for a low-margin trade, but Pilliod invested heavily anyway. Radials now hold close to the entire market, and a later boss, Sam Gibara, said that without that move Goodyear would not exist.
A detour followed in the 1980s, when management bought a gas company and a costly oil pipeline to escape the car industry's cycles. In 1986 the financier James Goldsmith took an 11.5% stake and pressed for a sell-off; Goodyear bought him out at $49.50 a share and unwound much of the diversification.
Source: Goodyear Tire and Rubber Company
