What's the difference between burning rubber and cooking books? Not much, it would seem, for Goodyear (NYSE:GT) as the world's third-largest tire maker is warning of even more accounting irregularities.
Back in October, the company announced that a bug in its accounting software had overstated earnings by roughly $100 million over the past five years. This time around, accounting improprieties in Goodyear's European operations threaten to blow out investor confidence.
After losing a stunning $1.1 billion last year, it seemed as if things could only get better. Nope. Unfortunately, it's not just Goodyear -- the entire industry is running low on air. Rivals Michelin and Bridgestone are struggling as well.
Goodyear has a turnaround plan in place, which calls for trimming expenses by more than $1 billion over the next few years. Fine. However, losing control during the turnaround process often produces a fishtail instead of a catch of the day.
No one likes to see the tire makers struggling. The big three automakers -- General Motors (NYSE:GM), Ford (NYSE:F), and DaimlerChrysler (NYSE:DCX) -- would simply be turning their wheels without them. But while cyclical ruts, spells of soft demand, and squeezed margins come and go, the tarnished brand that comes with accounting irregularities linger.
Worried about Goodyear and its tire-making peers? What about your car? Are you looking to make a move to a 2004 model, or are you happy with your current drive? All this and more -- in the Buying and Maintaining a Car discussion board. Only on Fool.com.
