FINDLAY, Ohio (March 4, 2010)—Cooper Tire & Rubber Co. is “cautiously optimistic” for 2010 based on a stronger-than-anticipated 2009 fourth quarter and its belief that there is pent-up demand for tires.
While generally optimistic, Cooper cautioned that it does not believe a surge in demand for tires will occur until consumer confidence recovers more fully, according to the company's newest 10-K filing with the Securities and Exchange Commission.
Cooper said it expects mature tire markets to return to growth approximating normal historical growth rates of 2 to 3 percent.
Stopping short of making a quantifiable forecast for 2010, Cooper CEO Roy Armes said the Findlay-based tire maker was “encouraged by the stronger demand in many markets for our tires” during the fourth quarter.”
This improvement, he said, led to the bottom-line progress Cooper reported for fiscal 2009.
Cooper said it believes the heightened demand will combine with relatively low levels of inventory to help it operate its factories at “very high utilization rates” this year. This is partially the result of the firm's efforts to optimize production capacity in recent years. Among those moves was closing Cooper's Albany, Ga., plant last year.
The company also expects to invest in increased inventory levels during the year, “both as a function of the normal pattern of seasonal demand and to support service expectations of customers,” it said in the 10-K.
Other actions on tap for this year are the launch of new products to meet market demands, growth in sales channels where the company is under-represented, and progress in emerging markets. These actions should position Cooper for growth “at or above industry rates.”
Investments this year, Cooper said, will include more manufacturing in lower-cost countries, manufacturing automation and the firm's LEAN-Six Sigma processes.