AKRON (Nov. 13, 2008) — Standard & Poor's Ratings Services has placed Goodyear's credit rating on CreditWatch with negative implications, an action the tire maker doesn't like.
The S&P's decision was part of a broader action that included putting 14 auto industry-related firms on CreditWatch.
“We're disappointed in Standard & Poor's action,” said Darren Wells, Goodyear executive vice president and chief financial officer. “There are fundamental differences between our business and the companies whose businesses are heavily tied to the Michigan-based auto manufacturers.”
Of some $20 billion Goodyear had in total sales in 2007, he said, less than 8 percent was with the global operations of the three Michigan-based auto makers—General Motors Corp., Ford Motor Co. and Chrysler L.L.C.
“This number will be lower given weak OE volumes in 2008. Our OE customers are important to us, but more than 80 percent of our sales are to the replacement market for consumers who already have vehicles,” Wells said.
The near-term impact of financial challenges among the Michigan-based car makers is not expected to be material to Goodyear's liquidity, he said.