'We're glad to have the stike behind us,' says Cooper's Dattilo
During a press conference to discuss his company's first quarter financial results, Tom Dattilo, Cooper Tire & Rubber Co. chairman, CEO and president, emphasized the impact the strike at its Texarkana, Ark., plant is having on the company.
He said 1.5 million to two million units were not produced during the duration of the stike, which began at midnight on March 12, 2005, and ended on April 11, 2005. The bulk of the shortage will be felt in the second quarter, Dattilo said. "Tires not produced are lost. We can't make that up. We will not have enough tires to fulfill the needs of our customers." (The Texarkana plant runs seven days a week.)
The company recorded a continuing operations net loss of $1 million during the first quarter of 2005 compared with net income of $2 million in the first quarter of 2004 (see related www.moderntiredealer.com item.)
Following the strike, the company is upgrading and adding new equipment and it will take several weeks before the plant is again operating at peak performance.
The company's order fill rates were in the high 80%, a number he feeels will continue to improve. "We're glad to have the stike behind us," Dattilo said. "Our third and fourth quarters look to be significantly better than the first two," he said.
Other factors will continue to impact profitability, including the rising costs of raw materials and gasoline that has an impact on miles driven. "It's difficult to get a clear read on the economy and where the market is headed," he said.
He noted the Rubber Manufacturers Association sees a 2% to 3% industry growth for all of 2005, and "we're OK with that prediction."
Pricing has been holding strong, Dattilo noted. Cooper raised prices in March by 4% and Dattilo feels the industry will support additional price increases due to higher raw material costs and the continuing improvements in the quality of tires.