Cooper Tire & Rubber Co. is moving its production of radial medium truck tires to China and converting the truck tire manufacturing space at its Albany, Ga., plant to performance passenger tires and specialty light truck tires.
Cooper will source 250,000 to 350,000 radial truck tires annually in Cooper and Mastercraft brand names from China's Hangzhou Zhongce Rubber Co. Ltd. in Hangzhou, Zhejiang Province. Hangzhou Zhongce will make the tires at its 13-year-old plant to Cooper's technical specifications using molds and manufacturing equipment being transferred from Albany.
The first Hangzhou-made Cooper tires should be shipped to dealers in early 2004, Cooper said.
Cooper Tire Group President Dick Stephens called the move a ``necessary strategy to make our overall product mix as competitive as possible'' and an opportunity to expand Cooper's current offering without significant capital outlay.
``We have been very candid about our plans to seek additional production in Asia to supplement our U.S. capacity,'' Mr. Stephens said in a prepared statement. ``We have been traditionally known as a low-cost producer in the U.S., and we continue to use lean initiatives to improve our quality and lower our costs. How much production we secure in Asia depends on the success of our efforts in the U.S. to make tires at the quality our customers demand at a cost which keeps us competitive in the marketplace.''
Cooper has been working with Hangzhou Zhongce for about three years in preparation for this move, a company spokeswoman said.
Cooper does not anticipate any changes in the distribution policy or logistics for its truck tires once they're sourced strictly from China, the spokeswoman said.
Daily capacity for truck tires at Albany is 1,200 units a day out of total capacity of 25,000 units, Cooper said. Employment is approximately 1,500.
The company declined to disclose anticipated savings from the move, the amount of investment at Albany to convert capacity there, the expected amount of new capacity at Albany for passenger and light truck tires, or the effect on employment.
Cooper has made medium radial truck tires since 1993 at Albany, which originally was a Firestone Tire & Rubber Co. plant. Cooper bought the vacant plant in 1990 and re-equipped it for tire making.
Aside from the new pact with Hangzhou, Cooper sources Cooper- and Avon-brand passenger tires from Taiwan's Kenda Rubber Industrial Co. Ltd., primarily for sale in Europe.
Hangzhou Zhongce is part of China Enterprises Ltd., formerly China Tire Holdings Ltd. It considers itself the largest producer of bicycle tires in China, with capacity for 50 million sets of tires and tubes a year.
With fiscal 2002 sales of $236 million, it is considered the world's 24th largest tire maker. It operates annual capacity for steel radial truck tires of 1.3 million units, along with capacity for 5.5 million bias-ply tires, 3.5 million radial passenger tires and 1 million motorcycle tires. It markets under the Chao Yang, Westlake and Good Ride brands.