Goodyear expects $150m hit following Venezuelan devaluation

ERJ staff report (DS)

Akron, Ohio -- Goodyear has responded to press speculation over the impact of the financial crisis in Venezuela on its business. Goodyear said it expects to record a charge of around $150 million in the first quarter of 2010 due to economic measures taken by the Venezuelan government.

Venezuela has suffered from hyper inflation, and has announced a two-tier currency exchange rate against the US dollar.

The official exchange rate has been devalued from 2.15 bolivar fuerte to each U.S. dollar to 4.30, except in the case of essential goods, for which the rate is 2.60. Some of the tyres and raw materials The Goodyear Tire & Rubber Company (NYSE: GT) imports into Venezuela have been classified as essential, while others have not. The company continues to evaluate the situation and is assessing the list of essential and non-essential goods and the imact of the two-tier excahnge rate on its business.

"We have a strong business in Venezuela with an outstanding and experienced leadership team that is focused on managing through the changes taking place in the Venezuelan market," said Robert J. Keegan, Goodyear's chairman and chief executive officer.

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Press release from Goodyear