Cooper will maintain momentum, says Armes
Roy Armes, Cooper Tire & Rubber Co.'s president and CEO, said he feels confident the company can maintain the momentum it has built up this year going into 2008.
At a press conference following the release of the company's third quarter financials (see related item, "Cooper reports record third quarter sales"), Armes said he feels encouraged by the progress the company has made. Recent highlights include the sale in October of Oliver Rubber Co., the sale of its steel cord business, and the joint venture the company launched in Mexico.
The company's push to reduce inventories while improving efficiencies was stymied in part due to a surge in winter tire demand larger than expected, higher frequency of tire production changeovers needed to maintain the correct product output balance, higher scrap and the need to move production lines from plant to plant.
Fill rates for the third quarter fell, but were "still at industry-leading levels," said Armes. Fill rates are "something we pride our business on," he said. "We've seen improvements. We strive to make sure our customers are getting the products they're asking for."
With improved plant efficiencies over the last four to five weeks, fill rates are creeping back up, he said. The company plans to build back inventory now and into the first quarter of 2008.
When asked if the company had picked up any of the private label business recently dropped by Goodyear Tire & Rubber Co., Armes said the company did see some benefit, but Cooper was being selective in the business it takes on, making sure it makes sense from a profitability standpoint.
Internationally, production continued to be increased at the Cooper-Kenda joint venture plant in China, Asia sales increased significantly while the market in Europe remainded challenging, and its Chinese production saw strong replacement tire growth, Armes said.
Armes expects Cooper will see a modest market share gain going into 2008. "We have built confidence in our customer base and will continue to modestly outperform the market."
He also noted, "There are no big acquisitions on our radar screen."