What's Next for Goodyear and Cooper? Analyst Healy Talks Brands, TireHub, Plants and More

June 7, 2021

"Our aligned integration program is ongoing and will take some time to yet come together," said Goodyear Tire & Rubber Co. Chairman, CEO and President Rich Kramer after the finalization of Goodyear's purchase of Cooper Tire & Rubber Co.

"Many specifics are still to be determined."

Tire industry analyst John Healy, who tracks Goodyear and Cooper closely, recently shared his take on several aspects of Goodyear's purchase of Cooper.

Healy, a managing director at Northcoast Research Holdings LLC, also writes MTD's monthly Your Marketplace column.

On the integration of Cooper's brands into Goodyear's product screen. (Note: the purchase of Cooper gives Goodyear five additional consumer brands - Cooper, Mastercraft, Starfire, Mickey Thompson and Dick Cepek - plus two truck tire brands - Roadmaster and Cooper - in the U.S.):

"The sense that we have is the brands that Cooper has are strategically of high value to Goodyear and I think the first thing they are probably going to look at is figuring out how they can take the Cooper product and put it across the Goodyear distribution platform - whether it's Goodyear itself or the TireHub network - and figure out how to expand and introduce Cooper to more places.

"And then once they see how the response to that is, you will probably see more longer-term decisions regarding brand, category and placements. But I don't think any of that stuff will happen ... until this point next year.

"Beyond introducing the product across the Goodyear distribution platform, I think it's going to be - at least initially - rationalizing duplicative aspects of Goodyear and Cooper and then probably a lot of things outside of building and selling tires - more on the corporate side of the business.

"And I think they'll start doing things on logistics: freight optimization, warehousing, probably raw material sourcing and stuff like that. I imagine that will probably start before year-end."

On whether TireHub - Goodyear's joint distribution venture with Bridgestone Americas Inc. - will sell Cooper products:

"I haven't gotten a direct answer. But my thought is this isn't a small acquisition that Goodyear is doing. Fundamentally, this Cooper acquisition likely changes the way Goodyear positions products and prices products.

"TireHub is just as important a part of (Goodyear's) go-forward strategy as anything, so I have a hard time thinking Goodyear won't make Cooper a part of that. I see few reasons why they wouldn't want to do that."

On possible manufacturing rationalizations (Note: the Cooper acquisition gives Goodyear a total of five consumer tire plants in the U.S.):

"It's probably not too early think think that won't be coming eventually. It appears they are able to close this acquisition without any sort of divestiture or having to do anything relating to exiting any business.

"My thought is (Goodyear will) start to look at how they want to reinvent the manufacturing footprint going forward. I'm sure there is going to be a lot of time spent on evaluating which plants in which markets have capacity and have capabilities to be redesigned and retrofitted."

Healy adds that he doesn't expect "major announcements" from Goodyear relating to its purchase of Cooper "before the end of the summer."

Goodyear announced on June 7 that it had completed the acquisition of Cooper.