Goodyear Taps Revolver

It builds cash as a strike wends into its second week.
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Goodyear (GT) - Get Report borrowed $975 million to build its cash hoard as a steelworkers strike enters a second week.

The Akron, Ohio, tire company said the it borrowed $300 million Oct. 5, the first day of the strike, and an additional $675 million Friday. The borrowings came from an existing credit line that is now almost fully drawn, Goodyear said.

"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 finance chief Richard J. Kramer. "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 covers 16 facilities in the U.S. 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.

Goodyear said its goal in the negotiations with the United Steelworkers of America is to reach a fair contract that enhances the company's competitiveness.