On December 6, 2014, Cooper Tire executives stated that the company will consider exiting the production business in the Chinese market after the company had already sold its shares in a joint venture.

The labor dispute between Cooper Tire and the Chengshan Group's Shandong joint venture has forced Apollo Tire of India to abandon its $2.5 billion bid for Cooper Tire, which would have been the largest deal for an Indian company to acquire an American company. The Chengshan Group management and the Chinese workers of the joint venture are worried about the debt that Apollo Tire will assume for the financing of the deal, while refusing to say that they are unwilling to work for an Indian company.

Cooper Tire has agreed to sell its 65% stake in its joint venture to Chengshan Group for US$285 million, which is the company’s largest production facility.

Although the Chengshan Group will continue to produce tires for Cooper tires until at least 2018, this US company is considering other supply options in China and other countries. Cooper Tire executives said that the company’s decision will be affected by China’s operational risks and an assessment recently launched by the US Department of Commerce, which is assessing anti-dumping duties on Chinese-produced tires.

“Given what we’ve learned in the past year, we will certainly be more vigilant.” Yan Wenshan, chairman of Cooper Tire, said in an analyst conference call: “We want to make a proper assessment of risks. ”

Yan Wenshan emphasized that China will remain "an important part of our long-term growth strategy." He also added that Cooper Tire is willing to cooperate with other Chinese suppliers and joint venture partners. In addition, Cooper Tire also decided to increase the production of another wholly-owned factory around Shanghai, or build a new Chinese factory. However, Yan Wenshan also confirmed that Cooper tires will consider purchasing tires from other countries such as Vietnam, or will shift production operations to these countries.

"That's a consideration." Yan Wenshan replied when asked about the possibility of purchasing tires from Vietnam. "The point we have to consider is that if something happens in (China), will we be protected in some way? We are considering all options."

Brad Hughes, president of Cooper Tire International Operations, said that the company has recently completed the sale of controlling interest in the Shandong joint venture, which is fortunate because the US government has decided to impose anti-dumping duties on Chinese-produced tires, and The Chinese market is facing a problem of excess supply.

“The situation in the tire industry is changing, and we have the opportunity to reevaluate our business operations in the Chinese market,” Hughes said. “We now have the opportunity that we haven't had when we are still operating a Yamagata joint venture.” He added: “The price of the Chinese domestic tire market will fall due to oversupply. The current environment has already inhibited the demand of Yamashina.”

Chengshan Group obtained a loan from the Bank of China to finance the acquisition of Cooper Tire's shares in the joint venture company, and conducted the transaction through a Hong Kong shell company to ensure that the factory can continue to receive a reduction as a foreign investment company. Tax treatment.