The Cooper Tire-Apollo Tyres saga officially has ended—no deal. Just a lengthy future court case as the parties fight over who pays the cost of the merger gone wrong. Right?
I don't think so. The machinery of change has been put in motion for both tire manufacturers, and it's not going to stop just because the word "Apollo" is a profanity at a headquarters in Findlay, Ohio, and "Cooper" is a term of derision at a home office in Gurgaon, India.
I base my opinion not on any particular inside knowledge of what the companies are planning. Call it a hunch coming from long observation of the rubber industry and some personal experiences.
Take Apollo. I've been to that company's headquarters in Gurgaon, a modern structure outside New Delhi. I met Neeraj Kanwar, Apollo vice chairman and managing director, for the first time, and he later spoke at one of our ITEC tire conferences, and I got to know him and some of his people. Sharp people, all of them, and they reflect the character of the company—an aggressively growing tire manufacturer that is hard on the path of being a global player.
The only thing from Apollo's side that surprised me about the Cooper deal was the timing. Apollo obviously would jump into the North American market someday, but I thought the Indian company had to absorb some of its expansions into other regions of the world first, such as Africa and Europe.
Cooper, though, was ripe for sale, apparently. Apollo couldn't wait. Until it developed buyer's remorse, or whatever reason the deal collapsed—which is what the court will decide, unless a settlement, just as likely, is reached.
Apollo still needs to jump into NAFTA someday and eventually establish manufacturing in the region. It will find a way. Hey, I heard Cooper is for sale.
Actually, I've been hearing Cooper would be sold—and that Cooper NEVER would be sold—since I started covering the rubber industry back when Jimmy Carter was president. Cooper was the "little guy," a U.S.-centric business that avoided OE and sold tires strictly through dealers/distributors. The word was the Big 4 tire makers—Goodyear, Firestone, Uniroyal and General—could crush Cooper in a moment but didn't need too.
Cooper had a reputation of doing things its own way. Tire dealers were an independent-minded bunch in those days, constantly and loudly fighting with manufacturers. But Cooper seemed above the fray, perhaps because it was seen as an "independent" itself, and strictly an aftermarket supplier.
Wall Street always expected Cooper to be swallowed up. Instead, the company turned itself into a global player, including for awhile in the non-tire area.
Today, though, Cooper is in play. Everything—more or less—has a price, and Cooper's board has revealed that of the tire maker. It also demonstrated that independence has no particular value in the decidedly unsentimental tire business.
Noga is a contributing editor to RPN and its former editor. He can be reached at [email protected]