Facing ever tightening inventories and fill rate problems, Continental AG will be building a new tire plant somewhere in North America in the near future.
CEO and chairman Elmar Degenhart made the statement toward the end of Continental AG’s annual shareholder meeting, held in Hanover, Germany, yesterday.
In addressing Conti’s tire operations, Degenhart stated: “We also want to cover rising demand in the NAFTA region, including the large U.S. market, with local production – so there are plans for a new tire factory there, too.
“Incidentally, these plans are further proof for the depth of the turnaround that the Passenger and Light Truck Tires division has achieved in the Americas region by means of determination and perseverance. Back at the beginning of the new millennium, the passenger and light truck tire business incurred massive losses in this region. Today it is profitable and, at the same time, a growth area. This is due to the division’s impressive management performance and the dedicated teams in the Americas. And the investments we are planning demonstrate that we are convinced of more success.”
Continental will review locations for a new Greenfield plant, and hopes to announce a location and construction timeline by the end of the third quarter.
While the U.S. is in the running as location for the plant, based on the actual wording of Degenhart’s statement so are Canada and Mexico. Given Continental Tire the Americas’ past difficulties with the USW, some of which resulted directly in the closing of two tire plants in the U.S., the company will certainly consider its relationship with the union.
CTA operates plants in Mt. Vernon, Ill., San Luis Potosi, Mexico, Camacari, Brazil, and Cuenca, Ecuador. Plans are in the works to add capacity at the Mt.Vernon plant, and CTA has already undertaken a $210 million expansion program at the Brazil plant.
