AKRON, OH — Goodyear Tire & Rubber has taken disciplinary actions against several senior managers in its European Union operation in response to its ongoing investigation of improper accounting in European and other overseas operations. Although the investigation is not yet complete, the company said it decided to begin the process of improving the European organization and to continue strengthening its accounting controls.
The company stated that these disciplinary actions do not mean that any determination has been made whether the final results of the investigation will have a material impact on its financial statements, and confirmed its previous announcement that, to date, no such determination has been made.
As part of the year-end closing process and unrelated to the investigation of improper accounting in Europe, the company has also identified adjustments to the previously announced restatement of its financial statements, which are expected to result in a reduction of operating earnings of $16 million over five years, and a reduction in shareholders’ equity at Sept. 30, 2003, of approximately $23 million. The largest of these adjustments arises from an understatement of workers’ compensation claims, related to the years 1999 to 2003 at one of its domestic plants. The company is currently reviewing the cause of the understatement.
The disciplinary actions taken in Europe include separation of several senior managers and reprimand of other European personnel.
“These actions represent an important milestone toward completing the investigation, which is necessary for us to file our audited financials for 2003,” said Robert Tieken, executive vice president and CFO.
Tieken also said Goodyear believes a significant portion of the European review has been completed, and that the company would make every effort to conclude the work as rapidly as possible, “consistent with the company’s commitment to do the job thoroughly and professionally.”
In accordance with Goodyear’s personnel policies and applicable local laws, the names of the affected individuals and their specific disciplinary actions have not been disclosed.
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