Conti Says It Will Shutter Plant Earlier - Tire Review Magazine

Conti Says It Will Shutter Plant Earlier

(Akron/Tire Review) Worsening business conditions, according to the company, has forced Continental Tire North America (CTNA) to accelerate its plans to suspend tire production at its Charlotte, N.C., plant.

Instead of ending tire production in September as previously announced, CTNA will end production for an “indefinite” period as of July 7.

CTNA has been embroiled in negotiations with the United Steelworkers (USW) to hammer out a new master contract for the plant, but after the old contract expired on Apr. 30, the tiremaker instituted an across-the-board 15% cut in wages and benefits, cuts aimed at reducing operating costs at the plant by $32 million annually.

The advanced shutdown was due to “high manufacturing costs at the company’s Charlotte plant, escalating costs for energy and raw materials and declining business conditions in the company’s North American passenger and light truck tire business,” according to CTNA’s official statement.

Some 480 hourly and salaried workers will lose their jobs two months earlier as a result.

“With skyrocketing costs for energy and raw materials, our ability to manufacture tires at competitive costs continues to deteriorate,” said Alan Hippe, CTNA’s president and CEO and a member of Continental AG’s executive board. “At this time, our Charlotte plant has the highest manufacturing costs of any Continental tire plant worldwide.

“At this point, we must take immediate and decisive action to reduce our manufacturing costs and return CTNA to profitability. Given our inability to reduce costs at our Charlotte plant, we must implement our plan to indefinitely suspend tire production in Charlotte and relocate these products to lower cost manufacturing facilities,” he said.

In March, CTNA cut some 140 jobs at the plant, and on May 12, Continental said it will cut another 172 jobs there, a move it announced in March. Another 50 salaried jobs will be cut on June 30, said the company.

CTNA said that, since last October, the USW rejected nine contract proposals the company made to reduce costs, and the union “was unwilling to offer anything near the manufacturing cost reductions sought by the company.”

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