The Goodyear Tyre & Rubber Company has significantly enhanced its cash position by borrowing nearly $US1bn under an existing revolving credit facility.
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The company said it borrowed approximately $675m on 13 October and $300m on 5 October under its $1.5bn US first lien credit facility. Thus, this particular facility is almost fully drawn, when including its $500m deposit-funded facility.
“Before the start of the United Steelworkers strike in North America, Goodyear had about $1.3bn in cash and cash equivalents and approximately $1.6bn in available credit lines,” said chief financial officer Richard Kramer. “This action provides additional cash in the unlikely event of a prolonged strike.”
Goodyear has implemented contingency plans to meet customer needs during the strike, which began on 5 October at 16 facilities in the United States and Canada.
“We are shipping products to customers from existing inventory, operating non-affected tyre plants as usual, operating affected plants with salaried employees and importing from our international operations,” Kramer said.
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By GlobalDataKramer reiterated Goodyear’s position that its goal in the negotiations with the USW is to reach a fair contract that enhances the company’s competitiveness and helps Goodyear win with customers.
“We cannot accept a contract that creates competitive and cost disadvantages versus our foreign-owned competitors and imports,” he said.
