AKRON, Ohio, Oct. 13 /PRNewswire-FirstCall/ -- The Goodyear Tire & Rubber Company today announced that it has significantly enhanced its cash position by borrowing nearly $1 billion under an existing revolving credit facility.
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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 strike."
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 tire 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.
Goodyear is one of the world's largest tire companies. The company manufactures tires, engineered rubber products and chemicals in more than 100 facilities in 29 countries around the world. Goodyear employs about 80,000 people worldwide.
Certain information contained in this press release may constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors, including the duration of the strike by the United Steelworkers (USW), the ability of the company and the USW to reach agreement on the terms of a master collective bargaining agreement as well as the ratification of any such agreement by the members of the USW, and any further actions that may be taken by the company or the USW in the event that no such agreement is reached. There are a variety of additional factors, many of which are beyond the company's control, which affect its operations, performance, business strategy and results and could cause its actual results and experience to differ materially from the expectations and objectives expressed in any forward-looking statements. These factors include, but are not limited to, actions and initiatives taken by both current and potential competitors, increases in the prices paid for raw materials and energy, the company's ability to realize anticipated savings and operational benefits from its cost reduction initiatives, potential adverse consequences of litigation involving the company, pension plan funding obligations as well as the effects of more general factors such as changes in general market or economic conditions or in legislation, regulation or public policy. Additional factors are discussed in the company's filings with the Securities and Exchange Commission, including the company's annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.
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