Cooper Reports 2008 Losses of $219 million

Cooper Tire & Rubber Co. has published losses of $219 million for the 2008 financial year. The company made profits of $120 million in 2007. 2008 group sales totalled $2.88 billion, down slightly from 2007 sales of $2.93 billion. According to a company statement detailing the financials, some of the 2008 losses can be attributed to restructuring charges from the company’s planned closure of its Albany, Georgia, tyre facility.

Cooper’s International Tire Operations division, which includes Cooper Tire Europe, reported sales of $176 million in the fourth quarter of 2008 compared with sales of $228 million in the same quarter of 2007. According to the company, this decrease was the result of decreased volume, offset by improved price and mix. Expansion of the facilities in China was partially affected by the decrease in demand globally for tyres. The segment was also negatively impacted by a $31 million charge for impairment of goodwill. For the full year, the segment reported net sales of $975 million, an increase of 11 per cent compared with the year before.

Cooper’s North American tyre operations generated sales of $2.14 billion for the year, down from 2007’s sales of $2.21 billion. As a unit, North American tyre operations saw a 2008 loss of $174 million, down from a 2007 net profit of $119 million.

Roy Armes, Chief Executive Officer, commented: “The tyre industry and our business are under intense pressure from several angles. These include volatile raw material costs, decreased global demand, and more intense competition. We are proactively taking steps to implement elements of our Strategic Plan and at the same time address market conditions. During the fourth quarter there were further decreases in the global demand for tyres.

“While the near term outlook is pressured by macroeconomic events around the globe, we believe the actions we are taking are appropriate and will strengthen our business longer term. We have been able to maintain considerable cash reserves to support our plans, and we maintain unused existing credit facilities. We are repositioning Cooper to emerge from the current recession a stronger competitor.”