FINDLAY, Ohio — Cooper Tire & Rubber Co. will ramp up its capital spending in 2020 in large part to upgrade and expand plants in Mexico and Serbia, where work already is under way to prepare them for additional production and product lines.
Cooper anticipates making $260 million to $280 million in capital expenditures this year, the company told the investment community today in a conference call covering the firm's fiscal 2018 performance.
Cooper did not specify how much of this spending — up from $203 million in fiscal 2019 — would go to each plant, but both factories are being targeted following other company decisions in the past year that enhance their importance to the firm's global manufacturing footprint.
In Mexico — where Cooper recently completed a deal to secure 100% ownership of its former Corporación de Occidente S.A. de C.V. joint venture — Cooper has restarted production after first letting go then rehiring the factory's work force under the new ownership structure.
Cooper said it expects to record roughly $10 million in restructuring charges in the first quarter related to transition changes at the El Salto, Mexico, plant, but longer term it expects to realize bottom line advantages from the changes there and at the Krusevac, Serbia, plant
Cooper Tire President and CEO Brad Hughes said the restructuring charges will cover costs related to the hiring changes as well as for retraining the employees under production methods in place at other Cooper factories. At last report, the Mexican plant employed 1,100 hourly workers.
Cooper raised its stake in the Mexican venture by buying the 42% stake held by its minority partner, Trabajadores Democraticos de Occidente S.C. de R.L. de C.V. (Tradoc), a workers' collective.
Mr. Hughes also said the capital spending would cover the installation of new equipment tied to the introduction of new product lines at the plant.
In Europe, Cooper is starting to ramp up production in the Krusevac factory of selected product lines moved there from the firm's plant in Melksham, England, over the past year.
Cooper will invest an undisclosed portion of the expanded capital spending there to support the expanded product range, Mr. Hughes said.