FINDLAY, Ohio—Cooper Tire & Rubber Co. will have a new leader after nearly a decade.
Roy Armes has announced his retirement from the firm, effective Aug. 31. The president, CEO and chairman will give way to Chief Operating Officer Brad Hughes—who has been named Cooper's next president and CEO, effective once Armes steps down.
The firm has decided to split the roles of chairman and president/CEO. Thomas Capo, currently the board's lead independent director, will assume the role of non-executive chairman once Armes retires. Capo has been a member of Cooper's board since 2007 and has been lead independent director since 2014. He served as chairman of Dollar Thrifty Automotive Group Inc. from 2003-10.
“With a focus on long-term strategic planning and outstanding execution, Roy spearheaded a positive transformation of Cooper's business model, creating a stronger, more resilient and sustainable company,” Capo said in a statement.
A company spokeswoman said in an email that the board determined it was prudent to separate the roles of chairman and CEO/president in conjunction with this decision. Armes served one year as president and CEO before becoming the chairman.
“This is a well discussed and debated topic with much written on the pros and cons of each approach,” the spokeswoman said. “Cooper's board makes regular evaluations of this matter and decides at the time what is best for Cooper.”
Armes joined Cooper in 2007 after spending nearly 30 years with Whirlpool Corp., holding leadership positions throughout the business' worldwide operations. The executive said in a statement he has been privileged and honored to have led Cooper for nearly a decade through good and challenging times.
“During his tenure, Roy led an expansion of Cooper's global footprint, significantly improved shareholder performance and transformed technology and innovation at Cooper,” Capo said in a statement. “Roy has our profound thanks for his outstanding leadership and the many contributions he has made to the company's success.”
The spokeswoman said two factors were important to the timing of Armes' decision—that the company be in great shape and in great hands. She said Cooper is in a position of strength with “outstanding financial performance and a business model that is solid, resilient and sustainable for the long-term future.”
Cooper recently released its financial report for 2015, with net income about even with 2014 at $212.8 million and sales dropping 13.2 percent to $2.97 billion—however that figure includes a gain of $56 million of net tax from the sale of its Chinese joint venture with Chengshan Group Co. Ltd. Sales increased 3.3 percent when figures from the joint venture sale are excluded.
Operating profit increased 18 percent to $354 million, which the firm said was a record 59 percent increase compared to 2014. Unit volume increased in all regions, by 6.8 percent overall against 2014.
“It was an exciting year for Cooper as we took numerous steps around the globe to continue to transform and enhance our business,” Armes said in a statement. “Our fourth quarter and full year performance was very strong, with unit volume increases in all regions and excellent operating profit. In fact, our full year operating margin of nearly 12 percent exceeded the 8 to 10 percent that we established as a mid-term goal for Cooper.”