Goodyear Tire (GT), a stock owned by activist hedge fund Elliott Investment Management, gained over 8% in early trading Wednesday after announcing a transformational plan that seeks to shed $2 billion in assets and reduce costs by $1 billion, among other action items. The company also announced that Richard Kramer will retire as Chairman, CEO and President of the Company in 2024.

Goodyear said after a thorough evaluation of all its assets, it has decided to actively explore strategic options for its Chemical business, the Dunlop brand, and its Off-the-Road equipment tire division. Evercore, Lazard (NYSE:LAZ) and Goldman Sachs acted as financial advisors to Goodyear.

Cost-saving measures are set to yield an annual benefit of $1 billion by the close of 2025. The company has kickstarted a targeted and executable plan for cost reduction, covering various areas such as operational footprint enhancement, plant optimization, purchasing strategies, streamlining sales, general, and administrative expenses, refining the supply chain, and optimizing research and development efforts. With multiple focused workstreams in place, Goodyear has a clear path mapped to achieve 100% of the targeted cost savings.

Further, the company announced top line actions driving an annual, run-rate benefit of $300 million by the end of 2025, segment operating income margin doubling to 10% by the end of 2025, and net leverage target of 2.0x – 2.5x by the end of 2025.

On behalf of Elliott Investment Management, analysts said, “We believe the ‘Goodyear Forward’ transformation plan represents a significant set of steps toward a stronger and more profitable Goodyear. We thank Rich for his leadership and the Review Committee for its collaborative engagement, and we look forward to continuing our dialogue with the Company as it implements these initiatives and works to deliver the substantial upside value that we see for all Goodyear shareholders.”