NEW YORK (Sept. 7)— Cooper Tire & Rubber Co. plans to cut costs by $70 million a year, improve profits by $100 million and slice inventories by $100 million in the coming months, according to the firm´s interim CEO.
Speaking to securities analysts in New York, Byron Pond said a "soft restructuring" of the company comes after the firm focused too much on growth and not enough on profitability.
"Our results have been disappointing," Pond said at a Credit Suisse Automotive Industry Briefing. "To continue on this course is unacceptable."
To get the company on the right track, Cooper will institute a more flexible manufacturing schedule, operating three of its four U.S. plants on round-the-clock schedules and the fourth on a variable schedule, Pond said. The company intends to make more use of temporary workers to effect this plan.
Cooper also will increase its imports of tires from China to help it improve margins and allow it to operate its U.S. plants more efficiently.
Among initiatives Pond outlined to help shore up the bottom line, Cooper will reduce SKUs in North America by 10 percent; consolidate its ultra-high-performance tire offerings into one brand; rationalize associate brand offerings; and reduce its low-end products.
The actions outlined by Pond will require $76 million in investments and will result in a one-time restructuring charge of $19 million.