Robert W. Tieken, Goodyear’s Executive Vice President & Chief Financial Officer, has issued a statement responding to Standard and Poor’s decision to downgrade Goodyear’s rating status. In the statement the company expresses disappointment over S&P’s action.
The rating agency last week cut Goodyear’s senior unsecured debt two notches to “Ba1,” its highest junk grade, from “BBB.” It also cut the company’s short-term debt to “B” from “A-3.”
S&P said Goodyear has reported “very disappointing financial results” over the last few years because of price competition, product shortages, changes in its product mixes and weak demand in major markets.
“Goodyear’s inability to effectively manage inventory levels over the period contributed to the demand/supply problems, adverse product mix shifts and the resulting profit pressures,” S&P said.
In response, the Goodyear statement from Robert W. Tieken says:
“We are disappointed. Goodyear has plans in place to improve profitability and continue to reduce debt.
“Tough global economic conditions and a highly competitive marketplace provide challenges for Goodyear and the entire transportation industry. During 2001, we took decisive action, focusing on improving liquidity and cash flow generation, introducing new and innovative marketing programs, improving the flexibility of our manufacturing operations and strengthening our cost and investment control processes.
“These actions are designed to provide solid and sustainable benefits. Going forward, the company remains committed to achieving a conservative financial structure through increased revenues, a continued focus on lower costs and working capital management resulting in improved earnings and reduced debt levels.”