FINDLAY, Ohio (March 5, 2009)—Cooper Tire & Rubber Co. said it will continue to implement the key elements of a strategic plan released in February 2008 to position the firm to respond quickly to a market recovery it expects will start next year.
Cooper will launch this spring new products in the economy and value segments of the market, according to CEO Roy Armes, addressing analysts in a recent conference call discussing the firm's 2008 results. Cooper did not elaborate on the nature of the products, which will roll out in the second quarter.
The key elements of Cooper's strategic plan are to increase sourcing from lower-cost countries, improve operations in existing facilities, improve organizational capabilities and pursue profitable top-line growth.
The decision to close the Findlay-based company's Albany, Ga., tire plant by early 2010 fits into this strategy, Armes said.
The CEO said Cooper defended its Cooper-brand market share in North America last year despite selling 16 percent fewer tires. The big declines came in the firm's private brand business, which makes up about a third of Cooper's business globally, and in broadline and light truck tires—similar to the decrease experienced in the industry, the firm said in its 10K filing with the Securities and Exchange Commission.
In addition, the company phased out some private brand lines and its own Dominator associate brand.
Partially offsetting this decrease were increased shipments by the segment to customers in Mexico and Canada, the firm said.
Cooper also is readying some new premium products for launch later this year, including the GFE (greater fuel efficiency) touring line the firm previewed at last year's Specialty Equipment Market Show in Las Vegas. The tire is expected to be available this summer in eight sizes in 14- to 16- inch rim diameters, a spokesman said.
Cooper also said it “will also pursue business in channels where it believes it is under-represented,” according to the 10K. The spokesman said this primarily means large regional and national chains.
Cooper did not specify its sales or earnings expectations for 2009 but did say it expects prices for commodities to stabilize at lower levels in the first half of 2009 and then begin to increase as demand for commodities strengthens.
The company also noted in its 10K that Shandong Chengshan Tire Co. Ltd., its partner in the Cooper Chengshan Tire ventures in China, has a put option now through Dec. 31, 2011, that would obligate Cooper to buy its 49-percent stake at a minimum price of $62.7 million should Shandong Chengshan choose to exercise the put option.