Research claims Goodyear may go broke, but analysts, Company say no

ERJ staff report (TB)

By Dan Shingler, Crain News Service

Akron, Ohio -- Goodyear is one of the 20 largest US companies most likely to declare bankruptcy, according to a list compiled by Audit Integrity Inc. But a tyre industry analyst who follows Goodyear is dismissive of the list, and the tyre maker itself notes that Audit Integrity not long ago had nice things to say about the Akron company.

Los Angeles-based Audit Integrity markets itself as a provider of independent and sometimes critical analysis of corporate finances and governance issues. It said it analysed the prospects of 2700 U.S. public companies with assets of $100 million or more, assessing the risk they face from factors including the companies' recent profitability, the strength of their balance sheets and corporate fraud.

In the case of Goodyear, Audit Integrity cited the company's high debt levels and lack of net income growth in giving the company a 6.9-percent chance of declaring bankruptcy in the next year.

Goodyear, however, noted in a written response to the report that Audit Integrity is singing a different tune about the company than it did in 2008.

“Just last year, Audit Integrity ranked Goodyear as the sixth most trustworthy company based on their evaluation of our transparency, reliability, corporate accounting and governance practices,” the statement read. “Goodyear's liquidity remains solid and bolstered by our $1 billion bond offering in May and success in first-half inventory reductions of nearly $700 million.”

Analyst Saul Ludwig, who follows Goodyear for Cleveland-based KeyBanc Capital Markets Inc., said he wasn't putting much credence in the Audit Integrity report.

“It's not on my list of companies that might go bankrupt,” Mr. Ludwig said, noting that even a 6.9-percent chance of bankruptcy, even if true, was a low probability.

From Tire Business (A Crain publication)

www.auditintegrity.com/