FINDLAY, Ohio (May 22, 2003)—Cooper Tire & Rubber Co. will idle its tire plants in Albany, Ga., Texarkana, Ark., Tupelo, Miss., and Findlay for four days, starting May 27, to allow the company to pare its inventory.
The tire maker blamed the situation on weak North American consumer replacement tire market. Demand during the first quarter for passenger and light truck tires slid 13 and 16 percent, respectively, while Cooper's sales during the period were off even more, the company said in its 10-Q filing with the U.S. Securities and Exchange Commission.
Cooper blamed the reduced sales volume in part on “significantly” lower demand from several of its private brand customers, on the “pull-forward” effect of Jan. 1 price increases and the continued penetration of low-cost imported tires.
Cooper's first quarter 2003 tire sales were off 8.6 percent to $396 million.
Cooper emphasized the shutdowns are temporary. The action will affect about 4,780 hourly workers at the four plants. The employees will be on unpaid leave, according to Roger Hendrickson, director of investor relations and corporate communications, who said they may choose to count the days toward their vacation time.
The four-day shutdown (Memorial Day, May 26, already was a scheduled day off) represents up to 520,000 units of production, according to available capacity data. The Findlay plant operates five days a week, the others on seven-days-per-week schedules.
Mr. Hendrickson declined to quantify the effect on Cooper's inventories; the company did not disclose the size of any costs associated with the action.