Though we are certain Feb. 22, 2021, will be a historic pivot point in the annuls of tire industry history, we can only wait and wonder about what it will mean for the future of the industry.
Akron-based Goodyear, the No. 3 global tire maker, struck a deal to purchase Findlay, Ohio-based Cooper Tire & Rubber Co., the No. 13 largest tire maker in the world, for around $2.5 billion ($2.8 billion in equity with $300 million in cash on hand in Cooper's coffers).
Or as we like to say from our home offices around Akron, Ohio's top two tire makers have agreed to join forces.
Once the deal is complete — the companies indicated in the second half of the year — the newly integrated company would be on track to generate about $17.5 billion in annual sales, based on 2019 figures.
After the deal closes, an enlarged Goodyear will be on more equal footing with its major rivals, although it will still trail Group Michelin ($25 billion) and Bridgestone Corp. ($24.3 billion) by a sizable margin from a global perspective.
In North America, Goodyear and Cooper tire sales, combined, accounted for 16.7% of the market in 2020; Michelin (19.2%) and Bridgestone (18.7%) are No. 1 and No. 2, according to Tire Business calculations.
In an industry that evolves as fast as a tire turns on the highway, this may well be the moment when CEO and President Richard Kramer and the team at Goodyear made the move to ensure the 122-year-old company remains among the industry's leaders for another 122 years.
We sure hope so.
The pandemic brought a wave of change, but in the tire industry the wave didn't make the change, it just delivered it to a wider population faster then many may have predicted.
The industry didn't expect to halt production for weeks last year, nor did it expect a mid-year surge in demand clogging international shipping.
But the industry did know that possible rising antidumping and countervailing duties and shipping delays made increasing domestic production look good in the future. The industry also knows that speed is as important to success as planning, execution and a lot of great engineers.
And that's what Goodyear gets in the Cooper deal. Having more production facilities should help the company streamline and become more nimble to respond to changing U.S. market attitudes — an important item to note as electric vehicles become more widely accepted.
We hope, too, that this deal sets up the Cooper brand, which can trace its roots back 107 years to — where else? Akron — for a prosperous future. Cooper's name carries a lot of weight in the tire industry and retains many loyal consumers, dealers and wholesalers.
While we don't know the plans or the timetable, we know one thing for sure: This is about evolving. The details are hazy, but what Goodyear saw on the horizon, it seems, is the sun rising.