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Without Cuts, CTNA Plans to End Production at Plant

(Akron/Tire Review) Unless it gets major concessions from union workers, Continental Tire North America (CTNA) now says it will suspend production at its Charlotte, N.C., tire plant in mid-September.

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CTNA had already threatened to cut production in half at the plant, laying off some 513 workers in total over two separate reductions, the first scheduled to take place Mar. 15 and the other in June.

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Now CTNA says it production at its hometown plant will be “indefinitely suspended” around Sept. 15 if United Steelworkers Local 850 does not agree to wage and benefits cuts of at least $32 million annually. That means that nearly all workers at the plant could be laid off by summer’s end.

“Due to skyrocketing costs for energy, raw materials and health care, CTNA cannot continue to operate the Charlotte plant with our current manufacturing cost structure,” said Alan Hippe, CTNA’s president and CEO, in announcing the planned shutdown. “ Because we have so far been unsuccessful in restructuring our labor agreement with the union to significantly reduce manufacturing costs, CTNA must take immediate steps to reduce its costs.”

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CTNA said it will continue negotiating with USW Local 850 to seek concessions, wage and benefit cuts pegged at around 35%. Since October 2005, when CTNA began talks with the union seeking cost savings, the company has offered four proposals and the union two, the tire maker claimed.

Hippe said the decision to suspend production at the plant “is not irreversible,” but cuts are needed to make the plant “competitive with other Continental tire plants worldwide.”

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