Goodyear Disciplines Managers in Europe

The tire maker also expects to restate its financials for the third time in six months, largely as a result of an understatement of four years of w...
Stephen TaubMarch 10, 2004

Goodyear Tire & Rubber disciplined a number of senior managers in its European Union operation in the wake of an investigation into improper accounting in the company’s European and other overseas operations.

The world’s largest tire company also found added accounting problems in its U.S. operations that will probably result company’s third restatement in six months. The company expects to adjust its operating earnings downward by $16 million over five years and a cut in shareholders’ equity as of September 30, 2003, of about $23 million, according to a Goodyear release.

The largest adjustment arises from an understatement of workers’ compensation claims from 1999 to 2003 at one of Goodyear’s U.S. plants. The company is currently reviewing the cause of the understatement.

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The need for the adjustments were identified as part of Goodyear’s year-end closing process and are unrelated to the investigation of improper accounting in Europe, according to the company.

The company announced the European investigation in December and last month expanded it to include all overseas operations.

The SEC is investigating the company as a result of its restatement of more than five years of results.

The tire maker, which wouldn’t reveal the names of the managers being disciplined or the specific actions against them, said in a statement that it “believes it is important to take these actions because business conduct policies were compromised, regardless of whether there is a material impact to the financial statement.”

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