Cooper's future, from the mouth of its CEO
Roy Armes, CEO of Cooper Tire & Rubber Co., says with 10 months left in the year, the company is in good shape. Solid financial results for 2011 helped.
(To check out Cooper's fourth-quarter and full-year results, click "Terrific fourth quarter spurs Cooper results.")
"Our manufacturing facilities are doing a great job of adjusting to very fluid conditions. The successful efforts we have made to improve our cost structure and increase the flexibility of our footprint over the last few years are evident in our results, and we believe further improvement can contribute meaningful results over the next couple of years.
"Moving forward, we will continue investing in the business and expect capital expenditures for 2012 to total $180 million to $210 million. This includes investments in an ERP system and investments to ramp up production at the Serbian plant acquired in early 2012. While this amount is higher than in recent years, we believe it is appropriate relative to the strength of our balance sheet, and the growth of our business.
"The successful efforts we have made to improve our cost structure and increase the flexibility of our footprint over the last few years are evident in our results, and we believe further improvement can contribute meaningful results over the next couple of years," he says.
"Regarding the labor situation, we are happy to have reached an agreement with USW Local 752L in Texarkana, Ark. This agreement will improve our long-term competitiveness at that plant. We have also reached a tentative agreement with USW local 207L at our Findlay, Ohio facility. The membership will vote on ratification of this agreement later today. We will not be commenting on the details of that contract prior to ratification.
"Our priority during the lockout has been to protect the supply of tires to our customers. In order to do this, we will incur premium costs during the first quarter which include additional overtime, the costs of mobilizing and training a temporary workforce and operating below capacity during the quarter. These costs will potentially be as high as $30 million in the first quarter of 2012.
"Even with the premium costs, we expect operating profit in the first quarter of 2012 to be similar to the first quarter of 2011. If the labor situation persists due to an adverse vote, we expect second-quarter premium costs to be much lower, reflecting higher capacity utilization.
"As we look forward to 2012, our record of achievement gives us confidence that we will continue moving the business forward despite the headwinds facing the industry and company," he says. "The path forward may wind at times, but we remain optimistic about our future."