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Rating Agencies Confirm Foolishness of Goodyear’s Strategy

For Immediate Release                                  November 20, 2006      

(Pittsburgh, PA) -- The United Steelworkers (USW) today pointed out that independent and highly reputable outsiders have confirmed the Union’s views on Goodyear’s issuance of new debt. The major credit rating agencies have confirmed that Goodyear’s new debt is highly risky and speculative and will be repaid only in the absence of adverse external conditions.

In a report issued on Friday, November 17, Fitch Ratings assigned Goodyear’s $1 billion in notes a CCC+ credit rating and a RR6 recovery rating. According to Fitch, a CCC+ credit rating indicates that “default is a real possibility [and that the Company’s] capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic conditions.” The RR6 recovery rating indicates that in the event of default, the holders of the unsecured debt will have poor prospects of recovering anything more than 10% of their principal and accrued interest.

Standard and Poor’s rates the new notes as B-, only one notch better than the Fitch rating. For Standard and Poor’s, the B-rating means that Goodyear currently has the capacity to meet its financial obligation on the notes, but that “adverse business, financial, or economic conditions will likely impair [its] capacity or willingness to meet its financial commitment.”

According to USW President Leo W. Gerard,  “Given Goodyear’s strategy of wagering $5 million a day – over $230 million to date - on a confrontation with the Steelworkers t