© Reuters. FILE PHOTO: An American flag flies at the Goodyear tire facility in Somerville, Massachusetts, US, July 25, 2017. REUTERS/Brian Snyder/File Photo
(Reuters) – Goodyear Tire & Rubber Co. said it would add three directors in agreement with Elliott Investment Management, months after the activist investor unveiled a stake and called for changes to boost the company’s financial position.
Elliott’s investment announced in May made him one of Goodyear’s largest investors. The company urged the company to modernize the board of directors, sell its stores and conduct an operational review.
Goodyear said on Tuesday it would set up a strategic and operational review committee. The committee will be chaired by CEO Richard Kramer and will include two of the three new directors. The activist company suggested that five new directors join the company’s board of directors.
Elliott, who has a history of holding board seats at companies including Twitter and eBay (NASDAQ :), has previously criticized the tire maker for mismanagement and falling behind its competitors, Michelin (EPA 🙂 and Bridgestone.
“Goodyear’s openness encouraged us to take the necessary actions to realize its full potential,” Elliott executives said in a statement on Tuesday.
Tire makers have come under pressure over the past few years from cheaper Chinese rivals and have faced scrutiny from regulators over concerns about tire contamination.
In the most recent quarter, Goodyear posted an adjusted quarterly loss of 29 cents a share, compared to the average analyst estimate of 30 cents.
The Akron, Ohio-based company said it will nominate up to 12 directors for election at its annual meeting in 2024, including the three new directors.
Evercore, Lazard (NYSE:) and Goldman Sachs (NYSE:) are financial advisors to Goodyear, while Paul Weiss is the legal advisor.
Shares of Goodyear were largely flat in early trading after rising about 3% before the bell.
