FINDLAY, Ohio (Aug. 7, 2009)—Cooper Tire & Rubber Co. is readying contingency plans for maintaining supplies to U.S. dealers should the Obama administration choose to impose duties on Chinese tires imported into the U.S., Chairman Roy Armes told analysts today.
Armes declined to say specifically what Cooper intends to do—saying the issue still has too many variables to consider—nor what impact it might have on Cooper's finances.
Cooper imports several million passenger and light truck tires annually from two joint venture factories in China, the majority-owned Cooper Chengshan (Shandong) Tire Co. Ltd. plant in Chengshan and the Cooper Kenda Tire (Kunshan) Tire Co. Ltd. 50-50 joint venture in Kunshan. The plant, with 5,000 units of daily capacity, manufactures exclusively for Cooper through 2012.
The U.S. International Trade Commission, responding to a petition by the United Steelworkers, is recommending the Obama adminstration impose duties on imports of Chinese-made passenger and light truck tires for three years, starting at 55 percent of value, then dropping to 45 and 35 percent in subsequent years.
Imports of passenger tires grew to 39.6 million units last year, valued at $1.23 billion, and imports of light truck tires were 6.54 million units, or $333.6 million, according to U.S. Department of Commerce data.
Cooper is looking at the “reality of various scenarios,” Armes said. “Given a reasonable enough amount of time à we feel we can deliver most of the tires” obligated to dealers.
The Obama administration has until Sept. 17 to make a ruling on the issue. The Office of the U.S. Trade Representative is holding meetings Aug. 7 with interested parties to gather more information.