Goodyear Seen in Good Shape Year After Raid

AKRON, Ohio â€”  Goodyear Tire and Rubber Co. remains atop the world tire industry and has increased its market share a year after an unsuccessful takeover bid forced the company to restructure.

Despite a 15% drop in worldwide employment, the loss of a $169 million Navy blimp contract, the sale of two subsidiaries and long-term debt of more than $4 billion, Goodyear officials say they have done better than Sir James Goldsmith might have.

“People have said our restructuring is just doing what Goldsmith would have done,� Robert E. Mercer, chairman and chief executive officer of Goodyear said in a story published Sunday in the Akron Beacon Journal. “But that’s not the case. We cut off an arm and a leg. He would have cut off both arms and both legs.�

In September, 1986, the British financier began buying Goodyear stock and by Oct. 31, 1986, had amassed 12.54 million shares, or 11.5% of Goodyear’s outstanding common stock. The following Nov. 20, Goodyear agreed to pay $49.50 per share and $37.6 million in expenses. The company also offered to pay $2.02 billion, or $50 a share, for 40 million of its own shares in its attempt to thwart Goldsmith’s takeover bid.

Goldsmith could not be reached to comment. In an unauthorized biography published earlier this year, however, Goldsmith said he did Goodyear a favor.

“As a result of my being there, the company’s share price is much higher, their earnings per share have doubled, and they are much healthier,� he said.

Goodyear in the last three quarters has earned $603.9 million, or $9.78 a share, compared with $236.9 million, or $2.18 a share, for the same period in 1986.

Mercer attributes that to restructuring, which reduced the number of outstanding shares by 43% and generated about $1.5 billion to lower debt through the sale of non-tire assets. Since the raid, Mercer has lobbied state legislatures and Congress to impose legislative barriers against investors like Goldsmith, but said he does not harbor ill will toward Goldsmith.

“He’s a professional in an obscene industry,� Mercer said.