More foreign-made tires may be in Cooper's future, says Dattilo
Following a disappointing first quarter, Cooper Tire & Rubber Co. will be looking at options like importing more foreign-made tires into North America.
The number of tires Cooper currently brings in from Asia is "very small," Cooper Chairman, CEO and President Tom Dattilo told investors during a late-morning press conference today.
"We do, over a period of time, say two to five years, want to increase our capabilities in China. We have plans to utilize that capacity."
Right now, Cooper is "in the planning stages of it," according to Dattilo, who adds that the total dollar amount of tires to be brought in "would be significantly less than $100 million."
Cooper's first quarter net income was $15 million, a 42% drop vs. the same period last year.
Its Q1 2003 net sales were $795 million, down from $813 million during Q1 2002.
The Findlay, Ohio-based manufacturer's tire business was off during the first quarter for a variety of reasons, says Dattilo, including rising raw material, energy and transportation costs, plus decreased consumer demand.
"The tire industry is in a state of flux and has to be viewed on a long-term basis, not just a day-to-day or quarter-to-quarter basis."
However, the recent introduction of Cooper's new ultra-high performance Zeon line "is already improving our product mix" and the company's acquisition of Mickey Thompson "will be a nice fit for us and will help us penetrate the high performance market a lot quicker."
Cooper's goal for the second quarter is to boost its operating margin by 10%.
Looking at the whole year, "we expect the second half to be stronger than the first half" in terms of tire demand.