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Goodyear Dunlop Tires Europe Signs 10-year Business Transformation Outsourcing Agreement with IBM

Deal is part of company's overall global procurement strategy

AKRON, Ohio, USA, & BRUSSELS, Belgium - 29 Mar 2004: Goodyear Dunlop Tires Europe - an affiliate of The Goodyear Tire & Rubber Company, the world's largest tire company - announced today a 10-year Business Transformation Outsourcing program worth an estimated 50 million Euros in cost savings in the first two years alone.

The agreement to partner with IBM on a procurement-to-payment program for indirect supplies represents another step in the company's effort to reduce costs by $1.5 billion by the end of 2005.

While Goodyear Dunlop Tires Europe will retain its core purchasing competencies, the activities of between 50 and 80 Goodyear Dunlop employees will be transferred to IBM, on a phased basis. The main savings will be achieved by leveraging IBM's procurement organization, which will negotiate on behalf of Goodyear Dunlop.

The procurement-to-payment project will establish a consistent and consolidated system across all 15 countries mandating a strict procurement process for all employees. Indirect supplies include such items as telecommunications, information technology, business travel, office supplies, marketing and advertising, manufacturing maintenance and repair expenses and professional services, among others. They do not include the company's purchase of raw materials.

In Western Europe the company's 2002 annual sales revenue was in excess of $3.3 billion.

Michael Roney, president of Goodyear Dunlop Tires Europe, said, "Goodyear Dunlop has made tremendous progress in the past two years introducing new products and serving our customers. This outsourcing program enables us to obtain major cost savings. The agreement with IBM builds on a well-established relationship between our two companies. Over the years, we have seen the results of IBM's own transformation take place and we are now poised to tap into this for our own benefit."

Gary Miller, Goodyear vice president and chief procurement officer, said, "We believe this agreement provides us with multiple advantages, including the ability to continue to maintain strong working relationships with our many global suppliers." Miller said the agreement is just part of the company's overall global procurement strategy.

David Dockray, managing partner, IBM Business Consulting Services, Europe, Middle East and Africa, said, "IBM took this step some time ago and is realizing significant savings. These savings accrue as a result of integrating process change, technology deployment and behavioural change - all at the same time. Our experience in IBM is available for leverage by our clients on a worldwide basis as exemplified by this agreement with Goodyear."

Bill Payne, IBM Business Consulting Services, Industrial Sector, said, "This agreement marks an important milestone in the long-standing relationship between IBM and Goodyear. IBM will enable Goodyear to take advantage of IBM's core industry acumen and process knowledge, supported by our proven technologies and realize substantial business value."

Initial implementation of the project has already started following a comprehensive review phase. The program is expected to be fully operational by early 2005.

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Certain information contained in this press release may constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors, including but not limited to the company's ability to fully implement, and realize expected cost savings resulting from, the Business Transformation Outsourcing Program. Additional factors that may cause actual results to differ materially from those indicated by such forward-looking statements are discussed in the company's Form 10-K for the year ended Dec. 31, 2002, and Form 10-Q for the quarter ended Sept. 30, 2003, and Form 8-K dated Feb. 11, 2004, which are on file with the Securities and Exchange Commission.


In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

Contact(s) information

Natalie Fine
IBM Media Relations
1-646-598-3155
natalie.fine@us.ibm.com

Richard Janes
IBM Media Relations
+44 (0) 20 7021 9370
richard.janes@uk.ibm.com

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