FINDLAY, Ohio—Cooper Tire & Rubber Co.´s new president and CEO isn´t from the tire industry, but he´s no stranger to some of the problems tire makers face — such as ever-rising raw material costs.
At Whirlpool Corp., Roy V. Armes, who was senior vice president, project management office, helped the company battle rising costs by investing in product innovations designed to spur profitability and improve productivity through global operations and controlled spending.
The project management office led Whirlpool´s $2.6 billion acquisition of Maytag Corp. last March, and a spokeswoman for the appliance maker said Armes largely was in charge of the Maytag integration.
As part of that integration, Whirlpool announced in May that it would eliminate about 4,500 positions and create 1,500 new positions for a net reduction of 3,000 employees. The reductions included plans to consolidate laundry washer and dryer production from three Maytag sites with two Whirlpool plants. Maytag administrative offices also were slated to be consolidated.
The executive comes to a company that has been undergoing its own, huge restructuring as it tries to update its identity as a broadline tire supplier to an innovator of high-performance, ultra-high-performance and other premium products. The firm has posted losses for six consecutive quarters.
Armes on Jan. 1 succeeded director Byron Pond, who served as interim CEO since August, when Thomas Dattilo resigned. Armes also was named a director, but the "office of the chairman" will remain as it is, occupied by Pond and directors John Shuey and Art Aronson.
Armes, 54, will receive an initial annual base salary of $700,000 plus benefits, according to documents filed with the Securities and Exchange Commission. Dattilo´s salary was $850,000 at his departure.
Armes also will be eligible to receive a target award equal to 85 percent of his base salary up to a maximum of 170 percent. For the 2007 fiscal year, Armes is assured an award of no less than 85 percent of his base salary, or $595,000. He also will receive an initial award of restricted stock units in an aggregate amount equal to $4 million, subject to a three-year cliff-vesting requirement and other terms.
"(Armes) has all the qualities we were searching for and the leadership capabilities to continue and successfully execute the company´s plans for profitability," Pond said in a statement. "He has the complete confidence of the board and will fit in well with our management team."
Armes has experience in engineering, manufacturing, global procurement and international operations management as well as developing customer relationships and consumer-oriented products, Cooper said.
Armes held several other posts during his 31-year tenure at Whirlpool, including corporate vice president/general director, Whirlpool Mexico; corporate vice president, global procurement operations; and president and managing director, Whirlpool Greater China.
"I think he´ll be able to draw from some experiences he has in similar countries or materials costs or labor and all these other factors that are certainly impacting Cooper," said Tony Cristello, an analyst with BB&T Capital Markets in Richmond, Va.
Since Armes was not in a more public role like CEO at Whirlpool, his exact contributions are a little hard to pin down, Cristello said, adding that a major quality Armes will bring to Cooper is an outsider´s perspective.
John Farkas, president and owner of Interstate Tire Distributor Inc. in Commerce, Calif., agreed that perspective could be a strong positive.
"Many times we all get caught up so much in our own little world that there are many things going on outside of our industry that we´re not aware of that we should be using," he said.
Cristello said Pond did a good job initiating a restructuring plan, even though more difficult decisions must be made. "I don´t think they were going to go down that path (of tough choices) until they had an active CEO in place," he said.