Last month, Cooper Tire announced that it was reopening its manufacturing plants in the U.S. and Serbia. This was after five weeks of closure following the COVID-19 pandemic. This month, the tire manufacturer has announced the reopening of more branches, specifically in Europe.
As of June 15 2020, manufacturing will resume in Melksham, England. The facility in question focuses on the production of racing and motorcycle Cooper tires. It has been closed temporarily since March due to the impacts of coronavirus.
Cooper Tire & Rubber Company said that it was putting measures in place to protect employees that would return to the plant. This is by adopting safety and health procedures such as increased disinfecting and cleaning of equipment and facilities, employee disclosures, visitor restrictions, physical and social barriers, among other measures.
The same procedures were adopted last month when Cooper plants reopened in Serbia, the United States, and China. According to reliable sources, these plants are ramping up production and are on their way to meeting demand, which had dropped due to impacts of the global pandemic.
Cooper Tire has managed to continually operate some of its plants and deliver products to customers despite the mishaps. In its announcement, it used what the Private Securities Litigation Reform Act of 1995 refers to as “forward-looking statements”. These are words used to describe the expectations, matters, and projections the company anticipates will take place when it comes to the performance of the industry, the U.S. economy, and the company itself in such times of risk and uncertainty.
Such statements are normally preceded by words such as expects, anticipates, should, intends, projects, believes, estimates, will, plans, and similar terms. Statements are made based on the company’s perceptions and views following the current situation which has no assurance. The possibility of actual results differing from the expectations and projections is possible.
This may be caused by any of the following factors:
1. Impact of the COVID-19 pandemic or similar public health risks on the company’s customers, suppliers, distribution channels, and operations.
2. Changes in supplier or customer distribution channels or relationships, as a result of COVID-19, including loss of business due to bankruptcy, liquidity, restructuring, competition, credit, or other reasons.
3. The ability of the company to resume operations at facilities that are on temporary closure due to coronavirus.
4. Volatility in energy and raw material prices, including steel, petroleum-based products, rubber, natural gas, or the lack of such energy and raw materials sources.
5. Failure by suppliers to deliver services or products as specified within their contracts.
6. Changes in trade or tariff agreements, or the introduction of increased or new trade and tariff restrictions that could be imposed on manufacturing equipment, tires, and raw materials that the company uses.
7. Effect of labor problems such as labor disruptions within the company, its ventures, or among its suppliers or customers.
8. Changes in global business and economic conditions, such as those related to the UK’s decision to withdraw from the EU.
9. Inability to increase and maintain prices to offset higher tariffs, energy, raw materials, and production costs.
10. Failure or disruption of IT systems within the company, such as those related to cybersecurity. This could have an effect on financial performance and business operations.
11. An increase in competition, especially where lower-cost producers and larger competitors decide to act.
12. Failure to achieve sales targets.
13. Failure to come up with products, processes, and technologies that support changes in consumer behavior or demand.
14. Costs and charges related to restructuring, adverse market, and industry developments.
15. Cooperation among competitors or customers or the consolidation of related activities.
16. The inability to implement strategic plans successfully or the failure to make accurate assumptions in developing operating and strategic plans.
17. Acquisition and investment risks, including failing to integrate them into operations and their related financing successfully. This impacts capital and liquidity resources.
18. Effect of litigation against the company, such as product liability claims, that could see the company spend resources to defend itself and mitigate unfavorable outcomes.
19. Legislative initiatives and government regulations related to healthcare, tax, privacy, or the environment.
20. Volatility and changes in credit markets and their accessibility.
21. Changes in foreign exchange rates and interest as well as benchmarks that guide the establishment of rates.
22. Adverse changes in company credit ratings which could affect access to credit markets and increase the cost of borrowing.
23. Failure to implement ERP and information technology systems successfully.
24. Risks associated with carrying out business operations outside the U.S.
25. Advancements in technology.
26. Inability to recover costs that could be used to develop and test new processes and products as well as refresh existing products.
27. High employee turnover and failure to keep key personnel.
28. Effect on pension funding or expenses due to changes in the company’s pension strategy, expected return, discount rates, participant behavior, accounting regulations, and investment performance in pension plan assets.
29. Changes in relationships between the company and its joint venture suppliers and partners.
30. Issues related to taxes, such as the impact of tax reforms by the government, the company’s ability to support specific tax positions, or the inability to take advantage of deferred tax assets.
These are but some of the factors that are assumed to have an effect on the actual results. It’s impossible to identify and foresee all factors. Companies based their assumptions on historical trends, experience, expected future developments, current conditions, and factors believed to be appropriate in the circumstances.
Like any other company, Cooper Tire mentioned to its investors that such statements are not a guarantee of actual results or future performance of the company. Developments could differ from projections. The company also made no commitment to update the forward-looking statements included even if they affect accuracy of projections, except as required by the law. Any extra information that could have a material effect on financial performance can be found in the filings submitted to the U.S. Securities and Exchange Commission (SEC).