Goodyear takes disciplinary action in Europe; makes adjustments at home
Goodyear Tire & Rubber Co. 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.
Several senior managers were "separated" from the company by European Union President Michael Roney. Some associates received reprimands.
"These actions represent an important milestone toward completing the investigation, which is necessary for us to file our audited financials for 2003," said Robert W. Tieken, executive vice president and chief financial officer.
Tieken added that a significant portion of the European review has been completed. It is not known if the results of the investigation will have a material impact on Goodyear's financial statements.
Although the investigation is not yet complete, Goodyear said it made these moves "to begin the process of improving the European organization and to continue strengthening its accounting controls." That includes streamlining its organizational structure.
Goodyear also announced that as part of the year-end closing process -- and unrelated to the investigation of improper accounting in Europe -- the company has identified adjustments to the previously announced restatement of its financial statements.
The adjustments 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.
According to Goodyear, the largest of these adjustments is directly related to the understatement of workers’ compensation claims at one of its domestic plants from 1999-2003. The company said it is currently reviewing the cause of the understatement.