CTNA Plans Capital for Mt Vernon, Wants Wage Cuts

(Akron/Tire Review) Just days after announcing significant cutbacks at its Charlotte, NC, tyre plant, Continental Tire North America (CTNA) said it planned a $60 million to $70 million capital improvement effort at its Mt Vernon, Illinois, passenger and truck tyre facility.

Calling it part of a “restructuring” of its tyre operations, CTNA also said that it was seeking a 10 per cent wage cut for hourly workers at the union plant, and an increase in their health insurance contributions.

There was no immediate reaction from the United Steelworkers (USW) to CTNA’s announcement.

Even after the reductions, CTNA said, “wage rates for hourly employees at the Mt Vernon plant will remain among the highest for manufacturers in southern Illinois.”

“We are asking that sacrifices be made, but we are also investing in the future of the Mt Vernon facility,” said Alan Hippe, CTNA’s president and CEO. “We value our employees, and our plan will help make Mt. Vernon globally competitive.”

CTNA called the capital plan “a major initiative to ensure long-term viability” for the Mt Vernon plant, the only CTNA tyre plant that hasn’t suffered cutbacks or shutdowns over the past three years. CTNA’s Mayfield, Kentucky, tyre plant was shuttered in December 2004, and its Charlotte plant faces a nearly 50 per cent cut in employment yet this year.

The capital infusion, said CTNA, “will improve efficiency and increase productivity through a combination of capital improvements and the restructuring of tire operations to bring overall manufacturing costs in line with global competition.”

Hippe said, “No other CTNA plant in the nation has received a capital investment on this scale.”

Part of the capital investment, CTNA said, will include a new “state-of-the-art” tandem mixer.

“Mt Vernon is an important asset to CTNA, as well as an economic mainstay to southern Illinois,” said Hippe. “Some of our decisions are difficult ones, but I am confident that, through this initiative, we will achieve our critical goals of reducing manufacturing costs at the Mt Vernon facility and securing CTNA’s continued presence in southern Illinois and North America for years to come.”

The Mt Vernon plant, opened in 1973, has an estimated capacity of 25,000 passenger tyres and 3,000 medium truck tyres per day.