PEARSALL, Texas — Cooper Tire & Rubber Co. is taking a look at its past as it determines its future course.
Following a few years of investment in the high- and ultra-high-performance tire segments, the tire maker is paying more attention to its broadline roots to regain balance between the two, the firm´s new CEO and president said.
Roy Armes, who joined Cooper in January following a 31-year career at Whirlpool Corp., said Cooper spent a lot of time and money trying to catch up in the high-performance segment but lost some focus on maintaining competitiveness.
"We´re kind of bringing a little bit more attention back to the broadline because it is still a very high volume in the industry and in our business, and we´re going to continue to support that," Armes said at a March product launch at Cooper´s test track in Pearsall. "And at the same time we´re going to be supporting any new changes or new market segments that are being developed out there."
The new product-the CS4 Touring-was touted as a premium broadline tire aimed at sedans, minivans and crossover vehicles. Armes said the higher-end tire may push the traditional definition of broadline tires.
"For us, we´re not going to spend a whole lot of time defining categories," he said. "We´re trying to define what are the market needs out there."
To get a sense of those needs, Armes developed a "90-day plan" to reach out to stakeholders as soon as he started the job.
He first talked to customers-eventually reaching about 200 dealers through visits and conferences. "I need to get out," he said. "I need to understand customers, what´s important to them, what´s not important to them."
Armes then reassured Cooper employees about the company´s direction and evaluated their talent. "I spent a lot of time trying to bring some calm to the organization," he said.
He visited with analysts, bankers and rating agencies as well as community leaders in Cooper´s hometown of Findlay, Ohio.
He also visited Cooper facilities in North America and even China.
"That was kind of my 90-day plan that was complete in 70 days, 60 days almost," Armes said, laughing. "But it´s helped me to get up to speed very quickly."
Though he´s new to the tire industry, Armes said he´s learned that many of the issues facing tire makers are similar at heart to those facing other industries, including appliances.
"I would still say today that the appliance industry prepared me well for the tire industry," he said. "Even though they´re different products, the type of things we need in Cooper are you´ve got to grow profit, you´ve got to continually improve your quality, you´ve got to be cost-competitive, you´ve got to innovate your product and you´ve got to have people to support all of that.
"I think those are pretty similar in a lot of industries today."
Armes said he´s pleased with the firm´s Chinese operations-both the acquired Chengshan facilities and the joint venture plant with Kenda Rubber Industrial Co. Ltd.-but he´d like to see the strategy accelerated.
His plan involves running the Kenda joint venture faster than originally planned as well as establishing a distribution network in China for the Cooper brand in the domestic market.
"So far we´re well on track with that, but we´re looking for ways we can accelerate that," Armes said.
Analysts in the past speculated that Cooper might close a North American plant, but Armes said no decisions have been made. The firm did cut employment and output at its Texarkana, Texas, plant as part of a realignment of manufacturing resources, but he doesn´t expect to make any other moves in the short or even perhaps medium term.
"We´re going to continue to look at that and how we can leverage our footprint globally to maximize and optimize the product that we can get out of those operations," he said. "Every operation has to continue to be competitive for us to continue to source product there."
Cooper still will be committed to the private label business, Armes said, though the firm´s long-term position will depend on what its private brand customers do. "As long as our customers are requiring those products, we´re going to try to continue to fulfill those needs," he said.