There are reports that, in the USA, Bridgestone/Firestone Inc. will be re-engaging 330 of the 700 workers who the company laid off recently from its Oklahoma City factory. The plant manufactures passenger car tyres and the latest move is in response to a need to increase output because of rising sales.
Bridgestone’s tyre factory at Poznan, Poland, has been officially opened. It is the company’s sixth tyre factory in Europe and one of 46 across the globe. It produces 10,000 Bridgestone and Firestone tyres daily, mainly high- and ultra-high performance tyres, with a workforce of 540. The factory is a joint venture with state-owned Stomil Poznan SA.
Nomura International, which holds a “substantial” equity stake in Romanian tyre manufacturer Tofan, has announced the sale of parts of the company to Michelin. The French company has bought the Victoria car tyre plant, the Silvania truck tyre factory, a retreading unit, a number of warehouses and the Tofan-owned distribution network. The purchase price was not revealed but a number of tyre manufacturers are said to have been interested. Tofan will continue to manufacture agricultural and implement (brand name: Danubiana) tyres and this business will be expanded, says Nomura, which remains a significant shareholder.
Tenneco Automotive is spending one million Pounds (1.6 m Euro) on a refurbishment programme at its Walker exhaust manufacturing factory at Tyseley, Birmingham in the UK. The investment will improve flexibility and reduce downtime between manufacturing different products. The factory produces two million exhausts a year.
Goodyear has announced that it is to close its tyre manufacturing factory at Tultitlan, Mexico. 1,559 employees will be paid off. The plant was opened in 1941 and Goodyear said that the reason for closure was that the plant’s “high costs are incompatible with current economic conditions.”
Compared to last year, Continental Group’s turnover for the first nine months of 2001 has increased from 7,438 billion Euro to 8,240 billion Euro (a rise of about 10.8%). The Group’s operational result (EBIT) of 238 million Euro (385 million Euro in 2000) has especially been affected by the North American tyre business and a non-recurrent expenditure of 58 million Euro due to the reconstruction process, begun in the second quarter and which has resulted in the closure of the truck tyre production site in Herstal (Belgium) and the remoulding site in Bad Nauheim. The Group’s result before tax has fallen by 160 million Euro down to 96 million Euro. After tax of 44 million Euro, the result is 104 million Euro more than last year’s amount, and the earnings per share are 0.35 Euro (1.16 Euro in 2000). Presenting the quarterly results at a press conference, Manfred Wennemer, who was appointed Managing Director on 11th September 2001, explained the Group’s directional change, concentrating on profits, results and cash flow and on cutting down financial debts, which also involves focusing on profitable transactions and devolving profit-and-loss responsibility on to the Business Units. Additionally, Wennemer announced some bigger restructuring measures: “All parts of the company are under scrutiny, and there are no holy cows”, he emphasised, adding the comment that factory closures and redundancies could be a possibility.
Press reports say that 800 workers at the tyre factory at Debica in Poland will be laid off by the end of 2001. This represents almost 19% of the total workforce of 4,218 and the move is part of restructuring plans. The Debica factory is controlled by Goodyear.
Managing Director of Malaysian tyre manufacturer Sime Tyres International, Ahmad Zubir Murshid, is reported as saying that the company has plans to spend the equivalent of US$ 2.65 million on expansion of its factory. This would double tyre output to 20,000 pieces a day. Rising demand, both domestically and in Europe and the Middle East, was given as the reason for the expansion, which is scheduled to begin at the end of this year and take three years to complete.
Alloy wheel manufacturer American Racing Equipment is to close down its factory in Warsaw, Kentucky, by the end of the year. Production will be transferred to other plants in California and Mexico and just over 200 workers will lose their jobs. The downturn in the US auto industry was blamed for the closure, particularly cutbacks at DaimlerChrysler. The Warsaw plant supplied wheels for the Chrysler Grand Cherokee, but cutbacks mean that the factory has been running at less than one quarter capacity recently.
Until today, the German Berliner Reifenwerke GmbH has been an example of the incompetence of authorities, banks and others. NEUE REIFENZEITUNG has already reported developments in detail, up to the appointment of the official receiver. Part of around 80 million Deutschmarks, which were originally supposed to build up Berliner Reifenwerke, have either been thrown away or squandered in order to support the lifestyles of some company leaders, and of which the creditors are unlikely to see a penny again. But things are not so bad, because the investment bank “Berliner Investitionsbank” has already managed other flops. The truly sad thing is that loyal employees of many years’ standing have been dismissed, and they are now without jobs or prospects. The fact that Berliner Reifenwerke – today called Berliner Runderneuerungswerke –, is still alive, can be attributed to both the official receiver and the RuLa shareholders’ delegates. Berliner Runderneuerungs GmbH was founded by RuLa and, because time is short, the plant is being leased from the official receiver, but for the moment this factory will stay in mothballs. Although the huge pressure of time has been relieved, conclusive decisions are needed for the medium-term, as the whole plant cannot be leased for a long term if the contractual partner is an official receiver. Soon, investors will run off.
The Brock-Group is known across Germany as an alloy wheel marketing company. Successfully marketing an assortment covering everything from commonplace to extravagant wheels, the group has gained the reputation of a quality supplier. Although it wasn’t carefully planned for future business, it cannot be purely accident that the group has owned a wheel factory in Bosnia for two years now. Meanwhile, nearly 100 machines are working in the factory 24 hours a day, 7 days a week, 50 weeks a year, with an annual production capacity of some 500,000 wheels. However, this figure alone does not say very much; equipment and machinery, as far as it has been replaced, is state-of-the-art, and it is obvious that within only a few months this factory will be run exclusively by new and modern machinery. E.T.R.T.O, KBA, TÜV, SF 1 JWL and Jaso standards are fulfilled in order to guarantee quality. The qualification procedure of the factory will take place this August. In the interview with NEUE REIFENZEITUNG, Claudia and Elisabeth Brock point out that in the future the Brock-Group will go on putting emphasis on the upper level, i.e. the high-tech level. The assortment consists of very nice and very costly wheels, which are in demand all over Europe and the marketing of which is very interesting for manufacturers and for both wholesalers and retailers. High class segments consisting of aesthetically designed wheels and many special sizes form the mainstay of the Brock-Group, well-known by the names Brock Car Fashion and Rad Center Derkum.
China Tire Holdings Ltd and Orion Tire Corp’s Lawsuit against Goodyear has been sent back to the federal court by the 9th Circuit Court of Appeals. This revives a long-standing battle over China’s grant of a joint venture plant to Goodyear. The claimants say that Goodyear unlawfully persuaded a state-owned factory to abandon a contract with China Tire. China Tire alleges that Goodyear gave gifts, including jewellery, scholarships and travel to Chinese officials. The case though may face early dismissal if China Tire do not present adequate new pleadings.
In common with other manufacturers in the UK, Goodyear has been suffering cost and productivity problems at its plant, which is not competitive in global markets. In October last year, Goodyear Wolverhampton took the step of issuing an HR1 notice to the Department of Trade & Industry, which in effect gave the workforce a number of possible solutions to the problem and a 90-day deadline to arrive at an answer. Since the issuing of the notice, discussions have been on-going between management and unions to try to thrash out a mutually-acceptable solution. Eventually, such a solution was agreed, which involved workers moving from a four-shift to a five-shift system, and which was recommended to the workforce by the unions. However, this recommendation was ignored and, in a ballot of the Wolverhampton workforce, the proposal was rejected. The reaction of Goodyear’s management to this was immediately to announce that it had “no other option other than to instigate actions that will make some 500 associates redundant from the Wolverhampton plant. Later it was announced that “only” 240 jobs are to be lost at Goodyear’s Wolverhampton factory. This is on top of 215 redundancies earlier in January, but the total figure of 455 is less than was originally expected after cost-cutting proposals from management were rejected by the workforce, despite being recommended by the unions. A Goodyear spokesman is reported as saying that the job losses could save the plant from closure.
It is hard to keep pace with the price of Bridgestone shares as they yo-yo up and down. Following a fall when the company announced the closure of the Decatur factory, the shares have risen by 0.77 per cent, outperforming the Stock Market. Japanese analysts believe that the factory closure and associated cost savings are a positive step.
Michelin is to invest 12m Euro in a new tyre warehouse at its Alava plant in Spain. The 30,000 square metre warehouse will employ 40 staff and will be for the exclusive distribution of the production from the Alava factory. The warehouse should be operational in 2002.
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