Cooper tries to solve plant problem for Apollo
In an 8-K filing on Friday, Nov. 1, 2013, Cooper Tire & Rubber Co. announced it had reached tentative agreements with the unions representing employees at its Findlay, Ohio, and Texarkana, Ark., consumer tire manufacturing plants.
"We moved forward with negotiations and the tentative agreements as part of our continuing efforts to do all we can to close the transaction with Apollo as soon as possible," says Anne Roman, Cooper's vice president of communications and public affairs.
The details of the tentative agreements were not disclosed.
Cooper's actions address one of the roadblocks to Apollo Tyre's purchase of Cooper, which was announced last June. Here, in italics, is the background behind the tentative agreements, plus details about the corresponding waiver agreement (in bold), as explained by Cooper in the recent 8-K filing.
As previously disclosed by Cooper Tire & Rubber Co., on Aug. 1, 2013, the United Steelworkers and United Steelworkers (USW) Local 207L (Findlay) and Local 752L (Texarkana), which represent employees at Cooper Tire's Findlay, Ohio, plant and Texarkana, Ark., plant, filed grievances alleging that Cooper Tire violated the successorship provisions of the collective bargaining agreement applicable to each plant by entering into the "Agreement and Plan of Merger," dated June 12, 2013, with wholly-owned subsidiaries of Apollo Tyres Ltd. pursuant to which Cooper Tire agreed to merge with a wholly-owned subsidiary of Apollo. The unions agreed to binding arbitration regarding this dispute and, on Sept. 13, 2013, the arbitrator ruled that an Apollo subsidiary must reach agreements with the unions before the Merger may close.
On Oct. 30, 2013, Cooper Tire reached tentative agreements with the unions and United Steelworkers Local 556L (Clarksdale). Details of the tentative agreements are not being disclosed pending review and consent by Apollo. The tentative labor agreements are also subject to review and ratification by union membership.
In connection with the tentative agreements, Cooper Tire also entered into a waiver agreement with the unions. The waiver agreement, among other things, provides that the tentative labor agreements reached amongst Cooper Tire, the unions and United Steelworkers Local 556L (as described above) will, in certain cases, satisfy the arbitrator's ruling so long as the merger closes on or before Nov. 18, 2013, even if such agreements are not yet ratified by union membership at that time.
"The trial remains scheduled in Delaware Chancery Court Nov. 5-7. "Cooper remains committed to the strategic merit of the pending merger," adds Roman.