Goodyear Tire & Rubber is considering restructuring options, including the closure of North American plants, shifting work to “low-cost” countries and cutting an unspecified number of jobs, the Wall Street Journal has reported.
Yokohama and the United Steelworkers of America have reached a provisional agreement regarding a new contract for the manufacturer’s Salem plant, according to American news sources.
The contract is pending approval by union members said Yokohama. However the terms of the new arrangement have not been disclosed. The previous contract, which expired in June 2003, was extended through negotiations. The Salem plant produces passenger, high performance and light truck tyres.
Mexican workers have bought the Euzkadi factory that Continental Tire had planned to close. By investing the severance packages that they received when the closure was announced in December 2001 the union workers have acquired 50 per cent of the factory that will shortly be renamed Cooperativa de Trabajadores Democráticos de Occidente. The remaining 50 per cent was purchased by Llanti Systems, a former customer of the factory and its Pneustone brand. At the same time the Mexican government honoured an agreement stating that union members who invested in the joint enterprise will be exempt from income tax.
Euzkadi’s closure left 1,164 workers unemployed, after claims that the factory was financially impracticable.
The fist tyre manufactured by the new enterprise is expected to be roll of the production line by mid 2005. The new company will have a capacity of between 10,000 and 13,000 tyres per day, a level similar to that of Euzkadi plant prior to its closure.
Continental AG reportedly plans to sell its Bryan, Ohio, OTR tyre production plant, according to a German Reuters report. Other sources indicate that the company is in talks with an unknown buyer. Continental declined to make any further comment.
The Bryan plant is said to have nearly 300 employees and the capacity to produce up to 300 off-the-road tyres each day. Last October, Continental sold its worldwide agricultural division to Ceska Gumarenska Spolecnost (CGS). As part of the agreement, the Czech company continues to produce and trade Continental, Semperit, Barum and Euzkadi tyres.
Goodyear Aviation is to supply tyres and tyre maintenance to Ryanair, under a new five-year contract.
The contract with the low budget airline began on 1 January and includes the delivery of new tyres and the repair and overhaul of aviation tyres that supply the current fleet of 66 Boeing 737-800s. This will extend to a further 96 aircraft, with up to 123 options to be delivered up until 2009.
BorgWarner Germany GmbH, Heidelberg, has announced that the closed share purchase agreement to purchase the majority of BERU AG’s shares, has been enforced. The announcement follows confirmation that BorgWarner Germany had agreed a share purchase agreement with The Carlyle Group and a group of family shareholders. This agreement accounted for 62.21per cent of BERU AG’s shares.
As a result, two representatives of the Carlyle Group (Mr Gregor Böhm and Mr Heinrich Rutt) and two other businessman resigned from the supervisory board.
Bandag Inc has agreed wide-ranging, six-year contract with US Xpress, the fifth largest publicly owned haulage company in the US, Modern Tire Dealer has reported. The agreement will come into effect at the beginning of January 2005 and will see Bandag manage a “total tyre programme” for 5,500 tractors and 14,500 trailers.
“Our tyre management services will help US Xpress better predict and manage tyre costs, and allow them to focus more time and resources on their core strength of meeting shipping customers´ needs,” says Martin Carver, Bandag´s chairman, CEO and president.
“By consolidating all of our of tire management tasks, we will reduce operating expenses,” commented Max Fuller, co-chairman of US Xpress. “We also believe we will increase our fleet´s uptime, which will ultimately lead to higher levels of customer satisfaction.”
Malaysian news sources are reporting that Lion Forest Industries Bhd is teaming up with Chinese tyre manufacturer Shandong LuHe Group Co Ltd to form a 75:25 joint venture company to produce Silverstone tyres in China. On 15 December the two companies said that Lion Forest’s subsidiary, Lion Rubber Industries Sdn Bhd, had signed an agreement with Shandong LuHe to form the joint venture company with paid-up capital of 152 million ringgit (approximately £21 million).
Lion Forest’s newly acquired subsidiary Quay Class Ltd and Lion Rubber also entered into an agreement with Silverstone Bhd’s 100 per cent subsidiary, iMpression Worldwide Inc, for the provision of technical know-how and services and the use of the Silverstone brand name. Silverstone Bhd is a wholly owned subsidiary of Silverstone Corporation Bhd.
Specialty equipment associations SEMA and Verband Deutscher Automobiltuner (VDAT) have signed a memorandum of understanding to promote increased cooperation between their associations and member companies.
“Working more closely together with our friends at VDAT will greatly enhance the ability of the specialty equipment industry to grow on both continents,” said Christopher J. Kersting, SEMA president and CEO. “It is essential that we join forces with our friends in Europe to be proactive regarding legislative and regulatory proposals which hamper the ability of consumers to personalize their vehicles.”
As a result of the agreement, SEMA and VDAT will become members of each other’s associations and exchange market and other information of mutual interest to members. In addition the associations say they will work together on legislative and regulatory developments affecting the industry in both markets and meet regularly to promote closer relations between organisations.
“I am very much looking forward to our cooperation with SEMA,” said Hans-Joerg Koeninger, VDAT general manager. “We will work together with this powerful trade organization for uniform and clear regulations for the approval of tuning products.”
Demonstrating their solidarity SEMA exhibited as part of the VDAT booth at the Essen Motor Show. VDAT will have a booth at the annual SEMA Show.
Cooper Tire has been given the ‘go-ahead’ to sell four of it Cooper-Standard Automotive plants having reached an agreement with the United Steelworkers of America (USWA) union. As a result an appeal to the US 7th Circuit Court of Appeals will be dismissed.
Previously Cooper had been under an injunction granted on 2 November, by the US District Court in Indiana. This followed a complaint filed by the USWA asserting the right to negotiate new labour agreements with a buyer before a sale of the four union facilities.
Cooper has already announced a definitive agreement to sell Cooper-Standard Automotive for $1.165 billion to an entity formed by The Cypress Group and Goldman Sachs Capital Partners.
“I am pleased that the talks with the Steelworkers have produced an expedited and favorable conclusion,” said Thomas A. Dattilo, Cooper’s chairman, president and CEO.
Mr Dattilo added: “We have continued working toward closing our transaction with the Cypress Group and Goldman Sachs Capital Partners throughout the process of negotiating with the union. This agreement certainly brings us closer to concluding the sale of Cooper-Standard Automotive, without any additional cost to Cooper Tire & Rubber Company. We continue to believe that the transaction will close before the end of the year.”
Exact details of the agreement have not been released. Cooper expects its deal with Cypress/Goldman Sach to be completed by the end of the year.
Titan International has announced that its Titan Wheel Corporation subsidiary has signed a supply agreement with Deere & Company. According to the company, the agreement secures wheel pricing with Deere for three years. The agreement excludes raw material price increases or decreases, these will be passed on to the customer.
”This is a very beneficial contract for both companies. Deere is ensured uninterrupted wheel supply and agreed upon pricing. In exchange, Titan will receive minimum order quantities and more accurate forecasting from Deere to increase productivity,” stated Maurice Taylor Jr., Titan president and CEO. “We congratulate the Deere team led by chairman and CEO Robert Lane on their record year, and the outlook for 2005 remains positive. Titan looks forward to growing with Deere and the rest of the agricultural and construction markets.”
The USWA has reported that members in Statesville, North Carolina plant have “overwhelmingly ratified a three-year contract with Goodyear Tire and Rubber Company. The agreement represents the first the first contract at the plant since workers collectively chose the USWA as bargaining representative in February 2004.
According to the USWA, 95 per cent of those eligible to vote were in favour of the new agreement, which provides workers with a network of job security measures. “Provisions that restrict the company’s ability to contract-out work will maximize the utilisation of our skilled and experienced members,” said local union negotiating committee member, Terry Gentle.
“We’re pleased that we have reached an agreement with Goodyear-Statesville that makes our members in Statesville partners in the ongoing turnaround of this company,” added Tom Drescher, local union negotiating committee member.
The USWA represents 130 employees at the Statesville facility. Overall, the USWA represents more than 18,000 members employed at 14 Goodyear tyre and engineered product facilities throughout the US. First contract negotiations continue at facilities in Asheboro, NC and in Utica, NY.
Continental and the USWA are in the process of negotiating a severance agreement for the workers affected by the closure of the company’s Mayfield plant. The two sides are at loggerheads over the package, which the company sees as generous, but the union calls an insult.
The union is unhappy about the company’s proposals. These include a lump-sum severance payment of up to $8,000 per worker, a maximum 30 day health insurance cover and a special fund of more than $1.1 million to help displaced workers find jobs, retraining, health care, relocation and other transition expenses.
Continental plans to cease production by 31 December and shift work elsewhere, leaving 60 workers in tyre mixing and warehousing and hundreds unemployed.
The merger of ContiTech and Phoenix moved a step closer today when the boards of the companies made a profit and loss absorption agreement. In line with the valuation agreed by both parties, Continental will hold 95.78 per cent of voting stock of ContiTech once the merger has taken effect. Continental currently holds 75.73 per cent of Phoenix’s voting stock.
During the merger ContiTech, currently known as ContiTech Holding GmbH, will change its legal status. In the future the company will be known as ContiTech AG. Continental says it is unlikely to make an initial public offering immediately after the merger is completed, but the company’s management has hinted that an IPO is possible.
The Garage Equipment Association has decided to support the Automotive Conference to be held at next year’s combined CVS and ATS show. Chief executive John Nelson explained his decision: “I firmly believe it is important to have events that the entire industry can get behind. There have been proposals for splinter events, but there seems to be no real demand for them. Our members want to be involved with events that maximise the chance to do business and we believe this is a step in the right direction.”
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