In its recent second quarter results announcement, Titan International reported the termination of the truck tire off-take agreement held with Goodyear since its purchase of Goodyear’s Latin America agricultural tire business last year.
Under the terms of the original deal, which was to run for three years, Titan would produce cross-ply light and medium truck tires for Goodyear at its plant in São Paulo, Brazil, and supply these at below market prices.
Titan says this deal was killed off in May 2012 and replaced by a new agreement, under which Titan will sell these products directly to third party customers and pay a royalty to Goodyear. Titan has recorded the remaining $26.1 million balance of the supply agreement liability to income as it is no longer obligated to sell products to Goodyear at below market prices. (Tyres & Accessories)
