Facing an ongoing federal investigation into whether it sold faulty tires linked to numerous fatalities, the Goodyear Tire & Rubber Co. on Friday posted higher profits for the three months through June amid growth in international sales.
The Akron, Ohio-based tire manufacturer said overall revenue increased 4 percent to $3.8 billion. U.S. sales decreased slightly to $2 billion, while sales in Europe and Asia grew 13 percent and 4 percent, respectively. Net income rose 6.4 percent to $164 million.
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Goodyear lowered its profit outlook for the year, citing higher raw material costs. Steel and aluminum prices are weighing on several companies after President Donald Trump imposed tariffs on the products.
“While our execution in the period was robust, macro headwinds are intensifying – including rising raw material costs, a stronger U.S. dollar and softening market conditions in China. We are adjusting our plans accordingly to mitigate the impact of these challenges over the intermediate-term,” Chief Executive Officer Richard Kramer said in a statement.
The National Highway Traffic Safety Administration is investigating allegations Goodyear covered up evidence that its G159 tires were faulty. The tires — which the agency charged have failed in as many as one in 10 vehicles — have been linked to nearly 100 death and injuries over the past two decades.
A Goodyear spokesman previously said that the company does not believe the tires were defective.
Automotive scandals routinely spur intense congressional scrutiny. Both the House and Senate, for example, conducted aggressive oversight of Takata’s recall of nearly 70 million airbags. To date, neither chamber has held any oversight hearings specific to the Goodyear incident, but key lawmakers say they are continuing to follow the investigation.
“Anytime you’ve got a safety issue that affects a major company, and especially a transportation company, it’s certainly something we’re interested in,” Senate Commerce Committee Chairman John Thune, a Republican from South Dakota, told the Washington Examiner.
Sen. Bill Nelson of Florida, the top Democrat on the commerce panel, declined to comment and a spokesperson did not respond to multiple requests for comment.
The NHTSA told the House Energy and Commerce Committee earlier this year that it may require Goodyear to pay as much as $21,000 per violation, up to a maximum of $105 million.
Looking to reduce reliance on third-party distributors, Goodyear recently teamed up with Bridgestone to launch a new distribution company called TireHub. Kramer said the initiative is “performing exceptionally well out of the gate.”
“Our shipments to the wholesale channel are running ahead of our transition plans,” he said in a statement.
