Cooper still assessing options for Chinese supply alternatives

ERJ staff report (TB)

Findlay, Ohio -- Cooper Tire & Rubber Co., which depends to a measurable degree on its Chinese joint venture factories for supplying US dealers with consumer tyres, is assessing its manufacturing options in order to meet its customers' needs in the wake of President Obama's decision to levy double-digit tariffs on Chinese imports.

Cooper did not disclose specifics of its plan, saying only in response to an ERJ query that it will “act quickly and appropriately to this decision as contingency planning has been under way. We are…assessing our options and will keep all stakeholders informed of decisions as appropriate.”

The Findlay-based tyre maker said its priority “is to continue to meet customers' needs while balancing the reality of these new business challenges.”

Cooper sources passenger and light truck tyres for its US customers from two factories in China: its own plant in Chengshan, China, and a 50-50 joint venture with Taiwan's Kenda Rubber Industrial Co. Ltd. in Kunshan, China, that has been producing Cooper-brand tyres since February 2008.

Prior to the White House's decision to impose tariffs on Chinese consumer tyres - 35 percent ad valorem for the year starting Sept. 26, and 30 and 25 percent, respectively, in the second and third years - Cooper testified at a US Trade Representative hearing, “The added costs of the duties would make any such imports economically unfeasible,” and imposing tariffs would “undermine Cooper's strategy of producing certain types of tyres in China and other tyres in the US”

In the US, Cooper produces consumer tyres at plants in Texarkana, Arkansas. Tupelo, Mississippi, and Findlay. It also operates a plant in Melksham, England, and has a minority stake in Corporacion Occidente, which operates a tyre plant in El Salto, Mexico.

From Tire Business (A Crain publication)