S&P: Cooper Tire on watch

Standard & Poor's said it placed its BBB- corporate credit and senior unsecured debt ratings on Cooper Tire & Rubber Co. on CreditWatch with negative implications because of the tire manufacturer's weak operating earnings and cash flow, which will cause credit protection measures to remain subpar for the rating beyond 2005.

S&P said Cooper's operating results continue to show negative year-over-year comparisons. Although sales were virtually flat in the second quarter, EBITDA declined 46%.

S&P noted the company's operating inefficiencies, as the company continues to transition its domestic manufacturing operations toward higher-margin products while increasing its supply of economy tires from Asia, reduced unit sales in the passenger car tire segment and high raw material costs, which increased by $31 million in the second quarter from the same period last year.

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