UA Business Researcher Expects Goodyear Deal to Generate Jobs
With similar cultures and complementary products, the deal Goodyear announced this week to acquire Findlay, Ohio-based Cooper Tire is a great marriage according to a business researcher at the University of Akron.
Goodyear announced the $2.5 billion deal Monday (see related story). It’s expected to be completed later this year.
U.A. Management Professor Debmalya Mukherjee says it as a good combination of two companies that can maximize their strengths. "People who buy Cooper Tires are more value conscious and Goodyear has advantages in differentiation and innovation," he said.
He says joining two large companies like Goodyear and Cooper requires strategic and organizational fit. The companies must consider whether the workers will gel. “In this instance, I don’t see any reason why they should not," Mukherjee said. "Both companies are rooted in Ohio, very similar organizational culture.”
It's unlike a previous acquisition attempt involving Cooper Tire. In 2013, Apollo Tyres, the largest tiremaker in India, attempted to buy Cooper, but the deal fell through.
Cooper's investment in research and development in the last decade has generated positive results, helping to attract suitors. The company reported a profitable fourth quarter amid a pandemic downturn for the industry.
Goodyear has long been committed to innovation, which has been a focus of Mukherjee's research. The company's commitment has endured even during hard times. “We call it innovation resilience, because when things are better, that kind of innovation actually pays off," he said.
Mukherjee sees only upside from this deal.
“I think this will be a very successful merger and this will be good for the tire industry and for Northeast Ohio region. Maybe I’m too optimistic but, you know, I’m that way. And as a business researcher, as a business scholar, I don’t see any red flag. This is all good.”
Goodyear expects the combined company to realize $165 million in savings over two years by eliminating redundancies. While that may lead to short-term job losses, Mukherjee expects future growth. “In the long run they will create a whole lot of jobs for Northeast Ohio area," he said.