Cooper Tire & Rubber Co. is selling off the $213 million plastics business it bought just six months ago, beginning with a South Carolina automotive trim injection molding operation. Cooper announced April 24 it has a deal to sell its Winnsboro, S.C., painted injection molded parts business to Plastech Engineered Products Inc. of Dearborn, Mich.
Findlay, Ohio-based Cooper Tire expects to wrap up sales for the rest of the division within months, said Chief Financial Officer Philip G. Weaver.
"At the least, we can make some announcements by the end of the second quarter," he said.
Cooper Tire bought the plastics division in late October as part of its purchase of Standard Products Corp. for $757.4 million, including $173 million in assumed debt.
Standard Products had $1.1 billion in sales last year, while the plastics units had a little more than $200 million, Weaver said.
Cooper Tire announced in February it was considering whether to divest the division or add to it. In addition to the painted trim unit, which Plastech bought for an undisclosed amount, the division takes in extruded plastics for the automotive, consumer appliances and construction industries.
The sale is not a surprise, said analyst Dennis Virag, president of Automotive Consulting Group of Ann Arbor, Mich.
Cooper Tire already took on extensive debts in the past year, between Standard Products and the $244.5 million purchase of the automotive fluid-handling division of Southfield, Mich.-based Siebe Automotive, completed in January.
Cooper Tire listed more than $1 billion in long-term debt in its 1999 annual report, up from $205 million in 1998. Net sales climbed to nearly $2.2 billion from $1.8 billion last year while profit rose to $135 million from $125 million.
"This is the first action to be taken as a result of our review of strategic options for our plastics division," Thomas Dattilo, president and chief operating officer, said in a written statement.
Virag would not predict if the remaining units will sell as a whole or as individual pieces.
Plastech will take over existing contracts at the Winnsboro plant, which produces painted injection molded trim for various automakers, said Lauren Rousseau, vice president and general counsel.
Once the deal shakes out, the company will consider new contracts and other changes to fit the site into Plastech's overall operations, she said.
"We've got to get our people in there first to consider all the potential," she said.
Plastech aims to keep all 339 employees in place.
Before the purchase, Plastech had nearly 2,500 employees at a dozen different operations in Michigan, Ohio, Kentucky, Tennessee, Iowa and Indiana, and about $350 million in annual sales.