By LOU WILIN - Workers are still refusing to make Cooper brand tires at the company's big factory in China, the Financial Times of London reports.

By LOU WILIN - Workers are still refusing to make Cooper brand tires at the company's big factory in China, the Financial Times of London reports.

Cooper Chengshan Tire employees oppose the planned $2.5 billion purchase of Cooper Tire by Apollo Tyres of India. Cooper Tire shareholders are expected to approve the sale in a vote on Monday.

The hostility in China is a concern because the Cooper Chengshan joint venture accounted for more than a quarter of Cooper Tire's total revenue and profit in 2012, the Financial Times reported.

On a large bulletin board just inside the main entrance to the factory is a letter written by the union, objecting to the sale, the Financial Times reported. It also reported that the union has banned from the factory in Shandong province its Cooper-appointed managing director, finance director and human resources director.

"In my view, Cooper is the father and we are the son," Ma Rufu, a 50-year-old worker and union member, told the Financial Times. "But Cooper has failed in its duty as a father, so we would rather sever the relationship. They are on the outside and we are inside. We have changed the locks at the family home and we are not letting them back in."

The unionized workers went on strike for a few weeks after the deal was announced. Since they have returned, they have refused to make any Cooper brand tires.

Cooper's Shandong workforce has cited issues ranging from the deal's debt leverage to potential culture clashes with a new Indian owner, the Financial Times reported.

"In China, India is still seen as a developing country and there might be certain undertones relating to that," said Kamal Rungta at EJ McKay, a corporate advisory firm that focuses on India-China deals, the Financial Times reported. "When you have an American or European company in control, they are associated with investment in new technology and so on."

Cooper's Shandong workforce says it will only relent if the transaction with Apollo is dropped, the Financial Times reported.

Apollo leaders are still upbeat.

"The strategic merits of Apollo's combination with Cooper are clear. Apollo looks forward to working with Cooper and representatives from the Chengshan Group and the United Steelworkers in these matters," Apollo stated to the Financial Times.

Cooper Tire leaders also have said they are hopeful they can reach an amicable solution with the Chengshan operation.

A week after the deal was announced in June, Cooper Tire CEO Roy Armes was surprised by hostility he encountered when he traveled to Shandong, the Financial Times reported. It was then decided that it would be unwise for Apollo's chairman, Onkar Kanwar, to make a followup visit to the plant, the Financial Times reported.

Cooper's partner in the plant in Shandong, Chengshan Group Co., in July filed suit in a Chinese court to dissolve the venture, claiming Apollo would "undermine" the Chinese operation.

Cooper later asked to have the dispute transferred to an arbitration panel in Hong Kong. The court rejected Cooper's request, and it is expected to rule on Chengshan's lawsuit in October, the Financial Times reported.

Separately, the Financial Times reported that lenders involved in the Cooper Tire purchase have no recourse for five years even if the companies struggle to repay the loans.

The arrangement gives the companies time to combine Apollo's presence in India, Africa and Europe with Cooper's operations in the United States and China, the Financial Times said.

It also seems to address concerns about the debt that Cooper is being burdened with in the deal. Cooper would have to make interest payments of $150 million to $200 million per year. Only twice in the past 10 years has Cooper earned enough to make Apollo-size payments and still have funds left to invest in the company, some retired Cooper Tire executives have said.

Cooper CEO Armes has said Cooper will have $100 million a year left after making those payments.

Separately, labor talks between Cooper, Apollo and the United Steelworkers union seem to be progressing, sources say. It is unclear when an agreement will be reached.

The talks were required when an arbitrator two weeks ago ruled that Cooper could not sell its unionized plants in Findlay and Texarkana, Ark., until Apollo Tyres reached an agreement with the union.

Wilin: 419-427-8413 Send an e-mail to Lou Wilin

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