By LOU WILIN
Preparations are being made to resume production of Cooper Tire & Rubber Co. brands at its Cooper Chengshan Tire joint venture plant in China, Cooper reports.
The factory stopped making Cooper-brand tires months ago in protest of the company’s proposed sale to Apollo Tyres of India.
That deal fell apart because of the opposition in China and lack of a labor pact between Apollo and unionized Cooper Tire workers in the United States.
Now, it appears the chill between Cooper and its Chinese partner is starting to thaw.
“Preliminary work to ramp up production of Cooper brands at (Cooper Chengshan Tire) is taking place,” Cooper Tire stated. “While this is a step forward in resolving the issues there, Cooper is looking to the labor union (in China) and joint venture partner to assure that production will indeed resume in full and will continue uninterrupted.”
However, another problem at the China plant remains unresolved. In its protest of the proposed purchase of Cooper by Apollo, the Chinese plant locked out Cooper officials and withheld financial performance information. That helped block the Apollo deal, because lenders would not release financing without information about Cooper’s performance in the third quarter of 2013. Cooper Tire is still seeking access to that information.
“It is absolutely critical that actions are taken (at the China plant) 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,” Cooper stated.
Cooper Tire also is rebutting statements made by an Apollo executive last week that Cooper tried to sell itself to its Chinese partner in June, days after it signed the agreement to sell to Apollo.
“On the 15th of June, this guy (Cooper Chengshan Chairman Zhe Hongzhi) was in the U.S. at their invitation to see if he would bid higher,” Apollo Tyres Chief Financial Officer Sunam Sarkar told Forbes India last week. “He did bid higher. He bid $38 per share ($3 more than Apollo) but Cooper believed his financing was not as committed as Apollo’s and chose to go ahead with Apollo.”
Cooper Tire rejects that statement.
“This meeting did not take place,” Cooper told Tire Review. “No bid was received from Chengshan Group after the (sale) agreement was signed.”
Cooper maintains that Apollo breached its agreement to buy Cooper. Cooper Tire is seeking damages against Apollo in Delaware Chancery Court.
Wilin: 419-427-8413 Send an E-mail to Lou Wilin
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