Cooper Tire signs agreement with Chinese to end dispute
1/31/2014FINDLAY — Cooper Tire & Rubber Co. announced early today that it has signed an agreement with its Chinese joint venture partner and a Chinese labor union that should bring to an end a months-long dispute that led to production halts and prevented Cooper from accessing financial data.
“With this agreement, Cooper gains certainty regarding sustained normal operations at CCT as well as a defined process for determining the long-term ownership of the joint venture based on a fair market value,” Roy Armes, Cooper's president and chief executive officer, said in a statement.
Cooper currently owns 65 percent of the Chinese venture, while Chengshan Group Company Ltd. owns 35 percent. Under the agreement, an independent valuation firm will determine the fair market value of the business. Chengshan will then have first option to either purchase Cooper's interest or sell out to Cooper making CCT a wholly owned subsidiary of the Findlay company.
If Chengshan chooses not to exercise either of those options, Cooper can buy out Chengshan's interest.
If Chengshan does purchase Cooper's share, the plant would continue to make some Cooper-brand products for at least three years.
Issues with the joint venture plant sprung up last year after Cooper's board agreed to sell the company to Apollo Tyres Ltd of India. That deal eventually was called off, with the Chinese work stoppage a significant point of contention between the two companies.
Cooper was up a little more than 1 percent to $23.11 in early trading.