Production ramping up at Cooper Chinese JV plant
FINDLAY, Ohio (Jan. 10, 2014) — Production of Cooper-brand tires is ramping up at Cooper Tire & Rubber Co.'s troubled Chinese joint venture, Cooper Chengshan (Shandong) Tire (CCT), in Rongcheng, China.
The plant played a key role in Cooper's decision in late December to terminate its $2.5 billion merger agreement with India's Apollo Tyres Ltd. after six months of disputes and court battles.
More than 5,000 workers at the joint venture factory had been on strike to protest the Apollo takeover of Cooper, which owns 65 percent of the venture, with China's Chengshan Group holding the rest. CCT union leaders were reportedly trying to block the Cooper-Apollo transaction from taking place because they didn't believe Apollo could repay the debt it would take on to finance the acquisition. The workers worried that it could put their jobs and pay in jeopardy.
Keep checking back at tirebusiness.com for further developments in this ongoing story.
Findlay-based Cooper issued the following statement regarding reports that production of Cooper-brand tires has resumed at the CCT facility in Rongcheng:
"Preliminary work to ramp up production of Cooper brands at CCT is taking place. While this is a step forward in resolving the issues there, Cooper is looking to the labor union and joint venture partner to assure that production will indeed resume in full and will continue uninterrupted.
"While restarting production of Cooper brands at CCT indicates positive progress, it is absolutely critical that actions are taken there to allow Cooper to resume regular financial reporting. This remains an open issue and we are working hard to resolve it as our top priority."
When Cooper announced on Dec. 30 that it was terminating the merger with Apollo, the company said working on restoring normal relations with CCT would be its first priority before looking at its other options, including other possible merger agreements.
"The issues at CCT were driven by the merger agreement, and with the agreement now terminated, Cooper is working independently to restore normal operations at CCT, including obtaining the information needed for Cooper to resume regular financial reporting as soon as possible," Cooper Chairman, CEO and President Roy Armes Armes said at the time.
"Once the situation at CCT is resolved and regular financial reporting has resumed, Cooper will be in a position to address additional options for the deployment of capital targeted at returning value for our stockholders," he added.
The tire maker also said it planned to continue to pursue legal claims against Apollo, claiming the agreement's $50 million termination fee against Cooper — if Cooper terminated the agreement — doesn't apply. However, the company said it will pursue the $112.5 million termination fee against Apollo along with other damages.
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