Keegan, Robert 1947–
Chairman, chief executive officer, and president, Goodyear Tire & Rubber Company
Born: 1947, in Rochester, New York.
Education: Le Moyne College, BS, c. 1969; University of Rochester, MBA, 1972.
Family: Son of Robert "Smiley" Keegan, a professional baseball player, and name unknown; married Lynn (maiden name unknown); children: two.
Career: Gleason Corporation, 1969, mathematician; Eastman Kodak Company, 1972–1986, distribution and marketing, then finance and marketing; 1986, general manager of Kodak New Zealand; 1987–1990, director of finance for Photographic Products Group; 1990, general manager of Kodak Spain; 1991–1992, general manager of Consumer Imaging; 1993–1995, corporate vice president; Avery Dennison Corporation, 1995–1997, executive vice president and global strategy officer; Eastman Kodak Company, 1997–2000, president of Kodak Professional, then corporate vice president, then president of Consumer Imaging and senior vice president; 2000, executive vice president; Goodyear Tire & Rubber Company, 2000–2003, president, COO, and director; 2003–, chairman, CEO, and president.
Awards: Oscar S. Stauffer Executive in Residence Award, Washburn Endowment Association, 2003.
■ Robert Keegan was named CEO and president of Goodyear Tire & Rubber Company in 2003 based on his experience in operations and global sales and marketing. Keegan developed a successful track record with the Eastman Kodak Company, where he spent 13 years working overseas in marketing and later helped fight off a challenge to Kodak's dominance in North American film sales. At Goodyear he was put in
charge of turning around the ailing tire company, especially its North American Tire unit. Described as a savvy marketer by industry analysts, Keegan was also known for his enthusiasm and emphasis on teamwork.
DECIDES ON BUSINESS CAREER
Keegan demonstrated his determination to succeed while still a college undergraduate studying mathematics. After his freshman year at Le Moyne College in Syracuse, New York, Keegan applied for a summer job at nearby Eastman Kodak to help pay for his college tuition. Kodak jobs typically went to the children of employees; Keegan was denied. Undaunted, he decided to wait in Kodak's employment office indefinitely. On the second day of his vigil, one of the employees' offspring quit, and Keegan was hired on the spot.
Keegan spent the next three summers working for Kodak. When they offered him a job upon his impending graduation, however, Keegan declined, citing an interest in pursuing law. Instead, Keegan ended up working as a mathematician in the R&D department of the Gleason Corporation, a gear-production technology company. Keegan soon decided that he wanted to pursue a career in business. As he told Hillary Appelman during an interview for SimonBusiness, "I went to business school because I saw finance and marketing and manufacturing, and I liked all those disciplines more than my work, which was very individual work" (2002).
Keegan decided to return to school and received his master's in business administration in 1972 from the University of Rochester's Simon School. He then signed on with his old summer employer Kodak. Keegan began working in a number of positions in distribution and marketing, first in the United States and then overseas. Spending time in England, Spain, and New Zealand, Keegan later recalled that dealing with various cultures proved to be a tremendous learning experience. He noted in SimonBusiness that such an experience "forces you to think through all your assumptions—not just your business assumptions but your social assumptions" (2002).
FIGHTS OFF FUJI
One of Keegan's most noted accomplishments at Kodak was his role in fending off Fuji's attempt to overtake Kodak in the American film market. In 1991, just a few months after Keegan had taken over Kodak's Consumer Imaging division, Fuji cut film prices 30 to 40 percent; Kodak's market shares quickly fell. Keegan believed that Kodak's marketing efforts in the United States were largely at fault, as advertising dollars had been cut and customers wants and needs had not been addressed.
Keegan's counterstrategy was to step up a marketing emphasis on persuading consumers to buy more and higher-priced film. Part of this marketing effort involved instructing consumers, who primarily used 100-speed film, about the benefits of higher-speed films. While slashing Kodak's prices on 100- and 200-speed film to compete with Fuji in that market, Keegan focused most of the company's advertising dollars on promoting Kodak's more expensive 400- and 800-speed film. He renamed the films "Kodak Max" and portrayed them as providing significantly higher-quality pictures. By 1994 Keegan's strategy had proven an unmitigated success, as Kodak not only retained its market share but also improved cash flow and attained double-digit growth in sales.
In 1993, after 21 years at Kodak, Keegan was promoted to senior vice president. Two years later he left Kodak to join the Avery Dennison Corporation as executive vice president and global strategy officer. As a key member of the senior management team for the manufacturer of self-adhesive materials, tapes, labels, chemicals, and office supplies, Keegan oversaw many of the company's global businesses, including the Automotive and Graphic Systems Group, the Asia-Pacific Group, and the U.S. and European Chemical Divisions. Keegan played a central role in developing the company's niche in the worldwide marketplace.
In 1997 Keegan returned to Kodak, becoming president of Kodak Professional, a division focusing on professional photography; he was soon made head of the consumer-imaging division. Over the next two years, Keegan developed a marketing strategy that led to 10 percent annual growth in film sales. He also helped the company set new sales records for their line of cameras. Keegan's key to success in sales was to follow a three-pronged strategy that included marketing to youth, selling more expensive film, and tapping into new markets, such as China. In early 2000 Keegan was appointed to the post of executive vice president.
JOINS AILING TIRE COMPANY
Within a few months of taking on his new duties at Kodak, Keegan was being wooed by the Goodyear Tire & Rubber Company, which was looking for a chief operating officer to help remedy a period of slow growth and poorly performing stock. They were especially interested in Keegan as a consumer-products guru who would be able to help the company refine its replacement-tire strategy—that is, to stimulate its consumer business as opposed to its business installing tires on new cars.
In September 2000 Keegan accepted the post as Goodyear's president and COO and immediately set out to boost global advertising spending. Keegan said the company was rethinking every aspect of its marketing strategy. An article in Rubber & Plastics News quoted Keegan as telling industry analysts in New York, "We need to increase the effectiveness of our message, and the efficiency of our media selection" (March 12, 2001).
Keegan was facing enormous pressures as the company underwent a tough year in 2001, with a $170 million fourth-quarter loss and an overall deficit of $204 million. Keegan decided to change the company's business approach to reflect that of another tire company, Kelly-Springfield, which had merged into Goodyear just before Keegan came on board. Specifically, Keegan wanted Goodyear to become more market driven, with emphasis on the customer, rather than allow the company to be driven by various operating functions such as manufacturing, technology, and logistics. The move represented a fundamental change in the business philosophy at Goodyear, which had typically been guided primarily by function. Keegan told Dave Zielasko for a Tire Business article, "It's really about understanding the consumer, what they want and what motivates them to purchase a particular brand and a particular product" (April 1, 2002).
Other strategies employed by Keegan to turn the company around included cutting production when demand declined. Previously the company had stockpiled and warehoused tires until the economy improved. It then sold the surplus tires, often at lower prices. Keegan also decided to improve the company's product mix, emphasizing higher-end tires that would return more profits to Goodyear as well as to retailers and independent tire dealers.
Keegan stayed true to his previous successful marketing strategies. Believing that tires in general were severely undermarketed, Keegan noted that people drove on tires every day and that drivers' and their families' lives could depend on the quality of their tires. His goal was to convince consumers of the legitimacy of this concept, the desired result being that they would be more willing to purchase Goodyear's top-of-the-line products.
In January 2003 Keegan was named Goodyear's CEO and quickly admitted that difficult and painful decisions would have to be made to counter persisting problems at the company. He laid out plans to slash costs by $1 billion to $1.5 billion and to reduce the size of the work force. He also began to pursue asset sales and adjust brand strategy. Meanwhile, he found himself facing intense labor negotiations with the United Steelworkers of America, in addition to strained relations with the company's independent tire dealers, who represented Goodyear's most important distribution channel. As noted by the editors of Tire Business, "With only two and a half years at the tire maker, much of what Mr. Keegan faces is the result of decisions made before his arrival" (May 26, 2003).
A month after his appointment as CEO, Keegan addressed a dealer conference in Cleveland, saying that the problems facing Goodyear would not be solved by a grand revelation or plan. As noted by Bruce Davis in Crain's Cleveland Business, Keegan told the dealers, "Many of our issues are right down at the execution level" (February 17, 2003). Keegan eventually renegotiated a three-year contract with the labor union, but only after announcing that Goodyear would cut 1,200 jobs in addition to the 2,600 jobs it had eliminated earlier in 2003. According to Keegan, the job cuts would save the company $350 million in 2004.
LOOKS TO THE FUTURE
Throughout his career, Keegan emphasized strategic marketing initiatives that focused on building brand strength. He stressed developing good leadership able to work together in teams. In Goodyear's case he noted that in the several strategic areas needing attention if the company was to be assured of future success—for example, lower cost structure and leveraged distribution—leadership was key. As he told Appelman in SimonBusiness, "I try to build a team around me with good complementary skills"; he added that he wanted people who were "driven, very passionate about what we need to do" (2002).
Industry analysts noted that although Keegan and his administrative team had initiated a clear turnaround plan for the financially troubled company's North American Tire operations, their difficulties had not yet been surmounted. In December 2003 Moody's Investors Service believed profits would remain elusive at the company's American tire businesses despite gains in such areas as replacement and high-end tires. Keegan acknowledged that the company continued to face many challenges, including rising costs in raw materials that were largely responsible for a $106 million loss in the third quarter of 2003. Nevertheless, he remained optimistic and pointed to such innovations as the Goodyear Assurance line of premium tires in 2004. Keegan was quoted in Canada Newswire as saying, "Market launches of bold new Goodyear products have been true difference makers in the past" (February 5, 2004).
See also entries on Eastman Kodak Company and Goodyear Tire & Rubber Company in International Directory of Company Histories.
sources for further information
Appelman, Hilary, "On the Wings of Goodyear," SimonBusiness, Spring 2002, pp. 6–12.
David, Bruce, "Goodyear's Turnaround Plan Rests Heavily on Accountability," Crain's Cleveland Business, February 17, 2003, p. 4.
"Goodyear to Boost Advertising Budget," Rubber & Plastic News, March 12, 2001, p. 3.
"Keegan's Got No Time for Honeymoon," Tire Business, May 26, 2003, p. 8.
"New Products Represent Another Turnaround Step for Goodyear," Canada NewsWire, February 5, 2004, http://www.newswire.ca/en/releases/archive/February2004/05/c6875.html.
Zielasko, Dave, "From the Catbird Seat," Tire Business, April 1, 2002, p. 1.