The ratings on Akron, Ohio-based Goodyear reflect its aggressive financial risk profile, characterized by low but improving, earnings in North America, a leveraged capital structure, and significant, albeit declining, 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, its good geographic diversity, its strong distribution, and its well-recognized brand name. Goodyear's financial performance strengthened during the past two years-–excluding the late 2006 strike period--resulting from new product introductions, price increases, improved product mix, and cost reductions. But its North American operations, accounting for about 50% of total sales in 2006, still need to demonstrate further improvement. North American operations reported an operating loss in
