AKRON (Dec. 26, 2002) — Standard & Poor's Ratings Services lowered Goodyear's corporate credit rating on Dec. 24, prompting Goodyear to issue a response saying it already has instituted changes that address S&P´s concerns.
Goodyear's debt rating was dropped by S&P to "BB-" from "BB+." The ratings service also lowered Goodyear's $1.3 billion senior bank facility and other senior unsecured debt rating to "BB-" from "BB+." All ratings on the company were removed form CreditWatch, where they were placed Oct. 31, S&P said. The outlook is now negative.
The ratings firm said the Akron-based tire maker's "B" commercial paper rating was withdrawn.
Robert J. Keegan, Goodyear president and chief operating officer and incoming CEO, said the company is disappointed in the S&P decision. "While we understand their assessment that we need to improve our operating and financial performance, we already have a plan in place to achieve these objectives," he said.
"That plan involves revitalizing our North American consumer replacement tire business, building on the strong improvements we have made in other operations, and restoring revenue and earnings growth momentum, which in turn will build value for all our stakeholders."
Mr. Keegan acknowledged that Goodyear's North American Tire business "clearly faces several challenges and we have already taken decisive action to regain momentum in the market. We are also improving our operational performance, including ongoing cost-cutting efforts and the implementation of successful initiatives that have worked well in our six other divisions.
"These initiatives are being spearheaded by the new president of North American Tire whose track record includes the turnaround of our chemicals business."
On Dec. 1 Jonathan D. Rich, 47, took over the helm of the struggling North American Tire unit, replacing John C. Polhemus, who announced his retirement after more than 33 years with Goodyear.
S&P said Goodyear's debt as of Sept. 30 was about $5 billion.