The ratings on Akron, Ohio-based The Goodyear Tire&Rubber Co. reflect its aggressive financial risk profile, characterized by low earnings in North America, a leveraged capital structure, and heavy underfunded employee benefit liabilities. These factors more than offset the company's business strengths, including its position as one of the three largest global tire manufacturers, good geographic diversity, strong distribution, and well-recognized brand name. Goodyear has reported improved performance during the past year, resulting from new-product introductions, price increases, improved product mix, and cost reductions. But its North American operations, accounting for 50% of total sales, remain weak, with EBIT profit margins of about 2%, compared with total EBIT margins of about 6%. These operations are challenged by tough competition,
