AKRON (July 10, 2013) — Apollo Tyres Ltd.'s agreement to purchase Cooper Tire & Rubber Co. has "major ramifications" written all over it.
It also is a significant historical event for the tire industry. For Apollo, it means an acceleration of the company's quest to be a top-tier tire maker. It always was in the cards that the India-based manufacturer someday would enter the U.S. market. If a firm has global aspirations, it has to have a presence in Asia, Europe and North America.
Cooper's directors concluded the company hadn't gotten the respect it deserved from investors, and its stock was undervalued. Apollo's offer ultimately was too good to pass up.
Now predictions that Cooper someday would be swallowed up by another company finally are coming true—about 35 years after they first were made.
The general belief back in the era of the Big Four Akron-based tire and rubber companies was that little Cooper wouldn't survive on its own. Cooper was an oddity—no original equipment business, strictly an aftermarket supplier that served the independent tire dealer. No Cooper company stores.
Cooper's corporate culture varied from its giant competitors. It "did things differently," had better relations with the union and continued to succeed.
During the era when foreign companies bought all the major U.S. tire makers, save Goodyear, Cooper surprised many by remaining independent.
Everything changes, though. Cooper set on a course to be a bigger player in the tire industry, sold its non-tire business and aggressively entered production in China. Cooper today is a much different company than it was in 1980. It had to be.
When the deal is complete, only Goodyear will remain as a U.S.-owned maker of passenger and truck tires. The reality is, where a tire maker has its headquarters doesn't matter much anymore. Cooper and Goodyear, for example, ship huge amounts of tires into the U.S. from plants located in other nations, while the big money on tire production projects in North America—and the major job creation—primarily is coming from foreign-owned businesses.
In a global industry, all the big players are international businesses. Where a company is based has merit locally, but in the big picture, it mostly concerns just bragging rights.
This editorial first appeared in Rubber & Plastics News, an Akron-based sister publication of Tire Business.