The Goodyear Tire & Rubber Company, one of the world’s leading tire manufacturers, gave an outlook on the cost of its raw materials.

With 74,000 workers, the company manufactures its products in 57 production plants in 23 countries, including the United States, and has marketing operations in almost every country in the world.

Goodyear expects its raw material costs to increase by approximately $200 million in 2023 compared to 2022, including the impact of the stronger U.S. dollar and higher transportation and supplier costs.

This net increase includes higher raw material costs of about US$300 million and US$100 million in the first and second quarters of 2023, respectively, and lower raw material costs of approximately US$200 million in the second half of the year.

Also, the company projects that pricing and product mix improvements will more than offset raw material cost increases in the first quarter of 2023 by approximately $100 million.

Prices for natural and synthetic rubber and other raw materials have historically been volatile, and its raw material costs could change based on future cost fluctuations and changes in foreign exchange rates.

Goodyear

The company continues to focus on price and product mix, substituting lower cost materials wherever possible, working to identify new substitution opportunities, reducing the amount of material required in each tire, and seeking alternative raw materials to minimize the impact of rising raw material costs.

The main raw materials used by Goodyear are synthetic and natural rubber.

Synthetic rubber accounted for approximately 50% of all rubber consumed by the company in 2022.

Its plants located in Beaumont and Houston, Texas, supply most of its worldwide synthetic rubber needs.

Goodyear purchases all of its natural rubber needs from the global market.

In 2022, the company posted net sales of US$20.805 billion, a growth of 19%, while its net earnings were US$209 million, a decline of 72.6%, year-over-year.