The ratings on The Goodyear Tire&Rubber Co. reflect its aggressive financial risk profile, which is characterized by weak earnings in North America and a highly leveraged capital structure. The company has a weak business risk profile, which reflects tough global tire industry conditions and the company's high fixed-cost structure. These factors more than offset the company's business strengths, including its position as one of the three largest tire manufacturers in the world, good geographic diversity, strong distribution channels, and a well-recognized brand name. The tire industry is characterized by excess production capacity, leading to intense competition from large, diversified global players and more focused regional competitors. Fixed-capital and R&D requirements are high, and raw material prices are volatile.
