Goodyear Borrows $1 Billion As Precaution Against Prolonged Strike
The Goodyear Tire & Rubber Company has significantly enhanced its cash position by borrowing nearly $1 billion under an existing revolving credit facility. The company said it borrowed approximately $675 million on October 13 and $300 million on October 5 under its $1.5 billion U.S. First Lien Credit Facility. Thus, this particular facility is almost fully drawn, when including its $500 million deposit-funded facility.
“Before the start of the United Steelworkers strike in North America, Goodyear had about $1.3 billion in cash and cash equivalents and approximately $1.6 billion in available credit lines,” said Richard J. Kramer, executive vice president and chief financial officer. “This action provides additional cash in the unlikely event of a prolonged
Goodyear has implemented contingency plans to meet customer needs during the strike, which began on October 5 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.
Kramer 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.