Commercial restructuring: Enders mobilizes Cooper and Oliver
Since acquiring Oliver Rubber through its acquisition of Standard Products Co. in late 1999, Cooper Tire & Rubber Co. has made fully integrating the renamed Oliver Retreading Systems into its corporate structure a top priority. But it hasn’t been a painless process.
Several Oliver facilities have been closed since the start of 2000 as part of Cooper’s reorganization that ultimately resulted in the manufacturer’s creation of three tire group divisions later that year: North American Tire, International Tire and Commercial Products, which is captained by former Oliver Rubber President Larry Enders (pictured).
Cooper has entrusted Enders, a 30-plus year retread industry veteran, not only with the job of growing its commercial truck tire business, but also increasing Oliver’s retread market share, which, as of the year 2000, stood at 10% in the United States, according to Modern Tire Dealer statistics. Though Cooper’s loss of longtime Oliver customer Treadco to Goodyear Tire & Rubber Co. last September was a major blow, the Findlay, Ohio-based tiremaker is confident that Enders can turn its Commercial Division around by capitalizing on “synergies” between new truck tire production and retreading.
Enders took time to speak with MTD at last month’s World ITRA Expo in Nashville, Tenn., about the company’s plans:
MTD: How has the loss of Treadco affected Oliver?
Enders: It was disappointing to lose Treadco, but the reputation Oliver has for good quality and competitive programs is what brought them to us in the first place. Our ability to respond to Treadco’s needs and converting their shops over in a short period of time proved to the industry what our capabilities are. Those same values that are linked with Cooper’s values about meeting the needs of independent tire dealers is what will take us forward and replace that lost Treadco business.
MTD: Do you have any prospective clients?
Enders: We’re looking at various initiatives but I won’t comment on that now. (Not long after this interview took place, the company announced it had bought certain assets owned by Hercules Tire and Rubber Co. This upped Cooper Tire & Rubber Co.’s retread market share to 16%, according to Modern Tire Dealer estimates.)
MTD: What is Oliver’s outlook on the retread market?
Enders: The current market is soft and tied into the commercial truck tire market, which is driven by various factors, including the economy. There was a decline in the year 2000 from 1999 levels, and we’re seeing further erosion in 2001. It will probably be two or three years before it builds back up to 1999 levels.
MTD: What are the synergies between Oliver and Cooper’s truck tire business?
Enders: There are a number of synergies. We just went through a restructuring that allowed us from Oliver's administrative side to use Cooper’s corporate talent: the marketing department, the finance department -- a lot of their systems that provide strong support to dealers and customers. We were able to utilize those systems to strengthen relationships with our customers equally. The synergies between the talents of the Oliver people with the talents of the Cooper people and furthering the marketing and sales of medium radial truck tires is a natural fit because of Cooper’s experience in the commercial truck tire business and our knowledge of the profession’s specific needs. Right from the beginning, we felt very comfortable with the marriage of Cooper and Oliver.
MTD: What are your goals for integrating Oliver into Cooper’s structure?
Enders: The short-term goal was to integrate the administrative side of the business into activities at corporate headquarters in Findlay, Ohio. As of April 1, we’ve made that move. We’re looking to grow all segments of our business, including radial medium truck tires, retreading materials and other areas of our commercial products division. If you really focus on retreading and radial medium truck tires -- the focus will be to grow those separately. There will be on occasion some dealers who will benefit from a mutual relationship.
MTD: There have been predictions that Cooper’s commercial business will be de-emphasized. Is that a possibility?
Enders: That’s far from the truth. The integrations to convert all of Oliver’s systems over to Cooper took a significant amount of manpower and there was some cost involved. We want to grow our commercial side; that’s why we put together the Commercial Division. We’ve made some investments in our Albany, Ga., plant for the production of radial medium truck tires. When you put all those together, it shows our commitment. Our international plans also include commercial tires and retreads as we look for opportunities around the globe.
MTD:When will the integration be complete or is that an on-going process?
Enders: We’re nearing the end of the first phase of integration. The second phase is continuous improvement. It’s a never-ending process.
MTD: How will the Oliver-Cooper merger affect the independent tire dealer?
Enders: The combination of both companies’ talent, knowledge of the marketplace and resources will support the independent tire dealer in putting together products that are needed for their particular markets and the support of their sales.
MTD: Do you have specific market share goals in mind and a deadline for achieving them?
Enders: We have some goals internally but don’t want to talk about them specifically.
MTD:What impact will the Oliver-Cooper integration have had five years from now?
Enders: You’ll see the Commercial Products side of Cooper being stronger, you’ll see some growth and you’ll see higher brand recognition within our product lines, both Cooper and Oliver. You’re going to see the point where both brands will be recognized as being together.
MTD: You don’t think there’s that perception currently?
Enders: We’re still working on it. There are still people who think Oliver is separate from Cooper.
MTD: What is the biggest challenge you’re facing?
Enders: To meet the objective of growth in soft market.
MTD: What steps are you taking to achieve that?
Enders: We have some initiatives underway. Even though restructuring has consumed a lot of our time, we’ve been working on some initiatives we’ll be announcing later to support growth for the Commercial Products Division.