The COVID-19 pandemic temporarily halted the momentum that Cooper Tire & Rubber Co. had built up prior to the outbreak, but the tire maker said it is well-positioned for a strong future once the economy recovers. Chris Ball, senior vice president and president for the Americas, told Tire Business that Cooper has "a strong team, a solid cash position and borrowing capacity, appropriate inventory levels, a focused brand marketing strategy and a flexible global manufacturing footprint."
How would you describe business thus far in 2020?
Prior to the onset of coronavirus, which obviously has impacted the tire industry and caused economic uncertainty, Cooper was tracking well against our strategic initiatives and previously stated 2020 financial goals, and we had considerable momentum.
Looking ahead to when the economy recovers, we believe Cooper will be in a strong position. We have continued to transform the company into a consumer-driven organization with Cooper products more available where consumers want to buy tires. We believe, and are hearing from customers, that our value proposition—high quality tires at an affordable price—will be even more compelling for consumers in the future economy.
And, our heritage of manufacturing tires in the U.S. for U.S. consumers will be even more important coming out of this period of economic uncertainty. Consumer confidence in the Cooper brand continues to grow, and we are being selected as a partner of choice by our key distributors and retailers. We believe Cooper entered this unprecedented situation in a position of strength and will emerge from it even stronger.
What are some of the key changes the company has made in order to keep employees and customers safe during the COVID-19 pandemic?
Since the onset of the coronavirus pandemic, Cooper has adhered consistently to the following priorities in all of our actions:
- The health and safety of employees;
- Responsibilities to our broader community; and
- Commitment to our customers and all key stakeholders.
Our commitment to employee health and safety has been driven by a comprehensive health and safety standard protocol that we have applied across all facilities. This has included temporarily shutting down production at our plants worldwide, remote working, enhanced cleaning and disinfecting of facilities, following all guidelines for health and safety including social distancing and physical barriers that promote social distancing, emphasizing and supporting recommended hygiene practices, restrictions on visitors and more.
Today, with nearly all of our plants around the world operating and various teams returning in phases to our offices, we are proud of the way Cooper employees have stepped up to the need to protect their own health and safety as well as that of their coworkers. We continue to emphasize all health and safety measures strongly in all of our facilities.
What are some of the pleasant surprises you are seeing in the industry?
While not a surprise, we have been and continue to be pleased with the resiliency of our customers and their focus on being creative and innovative in meeting consumers' needs for tires at this time, as well as their optimism for the future.
Cooper's history includes fostering a strong sense of community engagement, and it's also been rewarding to witness so many acts of support our customers have given their local communities as well.
The partnership between Cooper and our customers is strong and growing even stronger over time as we collaborate more deeply to positively impact both of our businesses, together.
The USW has petitioned for antidumping and countervailing duties on passenger and light truck tires made in Thailand, South Korea, Taiwan and Vietnam. What is your company's reaction to that?
Cooper supports free and fair trade. This petition does not directly apply to Cooper as we do not produce passenger tires in these countries.
Where do you see the industry markets heading during the second half?
Due to the rapidly evolving environment and continued uncertainties resulting from coronavirus, we cannot, at this time, predict the impacts on our results for the second half of this year.
Cooper entered this situation in a position of strength with a strong team, a solid cash position and borrowing capacity, appropriate inventory levels, a focused brand marketing strategy and a flexible global manufacturing footprint. Overall, we believe Cooper is in a good position to benefit when the economy recovers, leveraging our value proposition for customers and consumers.
What kind of trends are you seeing in the marketplace? How is your company reacting to them?
Consumers are clearly putting a premium on value and that has long been central to our success as an organization. We have always been known for producing great tires at a great value, and we believe we are well positioned to benefit with a product portfolio that aligns directly to consumer demands.
Consumer confidence in the Cooper brand is growing every day, and our partners are poised to grow as well as we work to drive increased demand for Cooper tires.
Cooper recently announced it was awarding a quarterly dividend for the 193rd straight quarter. What does that say for the company?
It says volumes about our consistency and dedication to driving shareholder returns. For nearly 50 years — 193 consecutive quarters — we have paid a dividend to our shareholders, the owners of our company.
We are proud that Cooper has had such a strong track record of returning value to shareholders, many of whom are Cooper employees and retirees. Our shareholders continue to be supportive of the company and our long-term strategic plan. We must continue to balance their interests along with the commitments we have to our employees, communities, customers and all stakeholders.
The USW ratified a new, four-year agreement in March at the Findlay plant. Given today's economic uncertainty, how important is that to have completed?
We are pleased to have new union agreements in place at our Findlay, Ohio, Texarkana, Ark., and Clarksdale, Miss., plants. It is important to have cooperative working relationships among everyone in our facilities as it takes alignment and teamwork to remain globally competitive. We have great teams at our plants all over the world and are proud of the work they do to produce quality tires.
You were one of three tire makers honored for workplace efforts regarding LGBTQ equality. Why is that important to the company? What measures do you undertake in order to promote LGBTQ equality?
Cooper received a score of 100 percent on the Human Rights Campaign Foundation's 2020 Corporate Equality Index (CEI) and has been designated as a Best Place to Work for LGBTQ Equality. The CEI is a national benchmarking survey and reports measuring corporate policies and practices related to LGBTQ equality in the workplace.
We believe all employees should feel welcome, respected and valued for who they are, and we are pleased to be recognized for our policies and programs that support equality.
Among the programs we have in place to support our commitment are ongoing training, inclusive benefits and our Pride employee resource group, which advances the understanding of LGBTQ topics within Cooper and activates employee participation in events such sponsorship of the local Pride Picnic in our headquarters community of Findlay, as one example.
Cooper recently upgraded its winter tire lineup with the Discoverer Snow Claw, a pickup truck/SUV tire built for extreme winter conditions. How is that product being received? Do you see growth potential in the winter market?
In March, we announced our latest innovation in pickup truck and SUV tires built for extreme winter conditions. The new Cooper Discoverer Snow Claw tire gives drivers confidence and grip on the road in the bitter cold, snow and ice.
Rigorously snow-tested in four countries across three continents, the Discoverer Snow Claw features patented Snow Groove technology, which traps snow in the grooves of the tire for greater traction, handling and stopping power.
Designed and built by experts who know North American winters, the Discoverer Snow Claw is severe weather rated for winter and snow performance, holding the 3-Peak Mountain Snowflake (3PMSF) designation—another key assurance for drivers.
With the addition of the new Discoverer Snow Claw winter tires to the Cooper product lineup, truck and SUV drivers now have a great new tire option for extreme ice traction and excellent snow performance, which are essential for drivers to capably navigate extreme winter road conditions. We started taking orders for this tire in April, and are pleased with its reception in the marketplace.
I should also mention that we recently rolled out a new tire that is performing exceptionally well in the market—the Cooper Discoverer EnduraMax, which is designed to tackle the kind of rough roads that chew up tires and can be found just about everywhere throughout the U.S.
The Discoverer EnduraMax leverages advanced technology from Cooper's ultra-durable off-road tires into all-season tires made for small and midsize SUVs. With its Durable-Tread Technology, the Discoverer EnduraMax helps extend tire tread life with ultra-durable materials that resist wear and tear from rough road conditions such as gravel and uneven city streets, which can quickly wear out other tires.
In addition, this new tire is severe weather rated for winter and snow performance, holding the 3-Peak Mountain Snowflake (3PMS) designation, another key benefit for drivers.
Cooper does see potential for growth in winter tires and we are investing in this category with exciting new products like the Discoverer Snow Claw, and others such as the Discoverer EnduraMax, which while an all-season tire, has features that respond to consumer needs in the winter tire category.
Do you expect to roll out any additional products in 2020? What will they be and what sector will they serve?
We are excited about a new product in the all-season light truck tire category that will offer drivers an aggressive, rugged look, but will drive with on-road manners for everyday treks.
This new tire, which we will reveal in the coming months, will not only give drivers excellent handling and a quiet ride while on the road, it is also trail capable thanks to several unique features to enhance performance when venturing off road.
This is a tough-looking tire that has emerged from Cooper's longstanding expertise in designing outstanding truck tires for off-road driving, but we've combined this tire with innovations that also make it a smooth, noise-free ride for highway driving and everyday roads. More to come on this.
Is there anything else you would like to add?
We are exceptionally proud of the growth we have seen in consumer confidence in the Cooper brand. We also are deeply appreciative of the support of our customers as we go forward on this journey of becoming a stronger consumer brand that gives customers increased selling opportunities.
Cooper is built on a heritage of providing quality, reliable tires for drivers since 1914, and we understand the importance of providing consumers products they can drive with confidence. Our new slogan is "Go with the Coopers," and we believe this well-received message is a simple yet powerful statement to our customers and consumers that they can always count on Cooper to be a reliable partner.