Trelleborg to Transfer Production

Trelleborg AB has called for negotiations with the relevant unions about the closure of its manufacturing facility in the town of Trelleborg. The company says the decision has been made against the background of a diminishing market for the type of agricultural tyres it produces in the town. This combined with increasing competition from low-cost countries has led the company to evaluate a number of alternatives, Trelleborg says. According to the company a sufficiently profitable, long-term solution remains to be found.

About 4,000 tons of agricultural and forest tires are manufactured annually in the town of Trelleborg, a figure that makes up approximately 50 per cent of the group’s total sales of cross-ply tyres. Of the 730 residents that Trelleborg employs across the town, about 160 are involved in tyre production, the company says. One possible reason for the plant’s closure could be the type of tyres its produces. The Trelleborg facility produces cross-ply tyres, which the company admits “are losing considerable ground in the agricultural sector to radial tyres.” Trelleborg produces radial tyres at factories including the company’s plant in Tivoli, Italy.

Company research suggests that production “will be transferred to existing and new outsourcing partners during 2005.” In addition, the company says its focus on radial alternatives will gradually increase. Assuming that union negotiations are completed successfully, production is expected to continue until the end of 2005.

The costs for the closure and restructuring measures are expected to total 320 million Swedish krone (£24.62 million) before tax, of this the company reports that 125 million krone (£9.62 million) will affect cash flow during 2005.

In addition, as a consequence of previous structural measures within Trelleborg Automotive in Europe, the company says that certain properties in Breuberg will be “written down” with a number of personnel cutbacks being made.

Trelleborg reports that it will assist those workers left without employment, by helping them plan a programme of measures designed to smooth the transition into new jobs.