Goodyear Pension Plan Has $1-Billion Deficit
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Goodyear Tire & Rubber Co. said its pension plan has a deficit of about $1 billion because of $230 million in losses and a jump in the number of retirees last year.
Goodyear expected to earn $440 million on its pension investments last year, a spokesman said. That would have helped fund a planned increase in benefits beginning in 2001, which caused workers to wait until then to retire.
The deficit could have “significant” consequences on cash flow and earnings and may increase to as much as $1.2 billion this year, said Stephen Girsky, an analyst with Morgan Stanley Dean Witter & Co.
Goodyear issued about 4.3 million shares in the third quarter as a contribution to the plan, according to the company’s annual regulatory filing.
Akron, Ohio-based Goodyear shares fell 30 cents to $24.66 on the NYSE.
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