The Goodyear Tire & Rubber Company (NASDAQ:GT) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 09:00 am ET

Previous

The Goodyear Tire & Rubber Company (NASDAQ:GT) Q2 2020 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
Operator

Good morning. My name is Keith, and I will be your conference operator today. At this time, I would like to welcome everyone to Goodyear's Second Quarter 2020 Earnings Call. [Operator Instructions] I will now hand the program over to Nick Mitchell, Senior Director, Investor Relations. Please go ahead.

Executive
Nicholas Mitchell

Thank you, Keith, and thank you, everyone, for joining us for Goodyear's Second Quarter 2020 Earnings Call. I'm joined here today by Rich Kramer, Chairman and Chief Executive Officer; Darren Wells, Executive Vice President, Chief Financial Officer; and Christina Zamarro, Vice President, Finance and Treasurer. The supporting slide presentation for today's call can be found on our website at investor.goodyear.com, and a replay of this call will be available later today. Replay instructions were included in our earnings release issued earlier this morning. If I can now draw your attention to the safe harbor statement on slide two. I would like to remind participants on today's call that our presentation includes some forward-looking statements about Goodyear's future performance. Actual results could differ materially from those suggested by our comments today. The most significant factors that could affect future results are outlined in Goodyear's filings with the SEC in our earnings release. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Our financial results are presented on a GAAP basis, and in some cases, on non-GAAP basis. The non-GAAP financial measures discussed on the call are reconciled to the U.S. GAAP equivalent as part of the appendix to the slide presentation. And with that, I'll turn the call over to Rich.

Executive
Richard J. Kramer

Great. Thank you, Nick, and good morning, everyone. The second quarter was arguably the most challenging quarter in Goodyear's 122-year history and was definitely the most difficult operating environment that I've experienced during my tenure. Industry demand during the quarter was significantly affected by the actions, governments, businesses and consumers took to slow the spread of the COVID-19 virus. While these actions were necessary to deal with the many unknown surrounding COVID-19, the impacts were simply unprecedented. In April, we witnessed the significant declines in vehicle production around the globe as auto manufacturers idled factories to protect employees and respond to falling demand. At the same time, wholesalers and dealers reduced orders as shelter-in-place mandates restricted consumer mobility. In our commercial tire market, demand for truck tires also fell precipitously as fleets canceled orders for new tractors and trailers and ton miles rapidly deteriorated. These dynamics paired with the uncertainty in consumers' minds contributed to the steepest year-over-year decline in industry volume in history. Our April unit volume fell by nearly 70%, contributing to the 45% decline for the quarter. The month of April alone accounted for about half the reduction in our earnings for the entire quarter.

And as you know, we were quickly able to take out substantial costs during the quarter, and we will be prudent about how we bring cost back into