Case | HBS Case Collection | November 2006 (Revised March 2007)

Goodyear and the Threat of Government Tire Grading

by Felix Oberholzer-Gee, Dennis A. Yao and Elizabeth Raabe

Abstract

In the spring of 1977, Goodyear CEO Charles J. Pilliod Jr. was looking at an internal report on government and legal events relevant to the tire industry. Two items caught his attention. First, he noticed that an industry suit to block the government's proposed system to rate tires on tread wear, traction, and temperature resistance had been rebuffed by a U.S. appeals court. Although the court found fault with the government's proposals, the ruling could mean that the tire grading system was close to becoming a reality. Second, Joan Claybrook, a former Nader consumer interest group lobbyist, had just become head of the National Highway Traffic Safety Administration, the agency within the government that was in charge of producing the rating system. Pilliod wondered if the regulatory events might affect Goodyear's ability to maintain its world leadership in the tire industry.

Keywords: Competitive Advantage; Lawsuits and Litigation; Auto Industry; Rubber Industry; United States;

Citation:

Oberholzer-Gee, Felix, Dennis A. Yao, and Elizabeth Raabe. "Goodyear and the Threat of Government Tire Grading." Harvard Business School Case 707-494, November 2006. (Revised March 2007.)