Strike impacted 'solid margin' LT tire sales, says Dattilo
Cooper Tire & Rubber Co. is still "trying to make up for the impact of the strike" at its plant in Texarkana, Ark., said Tom Dattilo, chairman, CEO and president, during a press conference to discuss the company's second quarter financial results.
The work stoppage began in March and continued into April and reduced the company's net income by $9 million in the second quarter and $14 million in the first half (see related news item).
When asked if the problem was the company had too much of the wrong tires in inventory, Dattilo replied, "Let's put it this way, we don't have enough of the right stuff in inventory." The company's popular light truck, sport truck and SUV tire lines are produced at the Texarkana plant.
He reports the company will still see a bit of declining impact on light truck tires sales in the third quarter, with improvements coming in the fourth.
Even not being able to fill all orders for the light truck products, the company gained market share in this segment because, "our light truck portfolio is very solid," Dattilo said. With the Texarkana facility back on track, the tire mix will be significantly improved, he added.
Dattilo expects solid growth in tire demand over the next two quarters as well as another round of price increases to offset the affects of raw material cost hikes. He expects this increase will happen in the next six weeks to two months.
Dattilo also said moving truck tire production to China also will increase the company's efficiency. He said historically, the company's radial medium truck tire production was not efficient, but Cooper felt the need to produce the tires to complement is lines of passenger and light truck tires.
And when the company's Albany, Ga., plant is up and running at full capacity, it will be producing a good mix of passenger and light truck tires, aiding the company's fill rate goals, Dattilo said.