Ten, 20 years ago it was fashionable to speculate about the eventual disappearance of Cooper Tire & Rubber Co. With no original equipment presence, Cooper was deemed too small to play with the big boys of the tire game. Its non-tire business was nice, but Cooper wasn't a prime contender in that contest, either.
Buy Cooper stock, securities analysts said: Someday, when a major tire maker devours Cooper, the shares will provide a nice yield.
Cooper's latest move—an agreement to buy Standard Products Co.—completes the debunking of such predictions. Cooper isn't interested in cashing out.
Absorption of sealing, vibration control and tread rubber producer Standard Products will turn Cooper into a company generating more than $3 billion in sales. With as much as $1.4 billion of that coming from its engineered products business, Cooper is setting itself up to be the kind of full-system supplier the auto makers crave.
The automotive systems area is a hotbed of corporate buying and selling today. Firms like Freudenberg-NOK G.P., Dana Corp. and Federal-Mogul Corp. are jockeying for position, and now Cooper is right there with them.
So where does that leave Cooper's tire business? In a pretty good position. The company hasn't scrimped on investment, and has good relations with its dealers. The deal, announced in February, to take over sales and distribution of Pirelli-brand tires in North America, offers a lot of potential for Cooper, including a market presence abroad.
Smart money rides on Cooper for the long term.