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Titan Tire Corporation says it welcomes news of the ‘affirmative injury’ determinations issued on August 15 by the US International Trade Commission (ITC) regarding the antidumping and countervailing duty investigations concerning off-the-road (OTR) tyres from China. By a vote of 5 to 1, the ITC ruled that these OTR tyre imports from China were causing material injury to US industry.
The International Trade Commission affirmed a previous ruling by the Commerce Department, voting 5-1 to place anti-dumping and countervailing duties on certain OTR tyres imported from China. It was the final step in a year-long investigation by the U.S. into complaints filed by Titan International and the United Steelworkers. The final duty and penalty amounts will be posted by the Commerce Department later this year but are expected to follow its previous schedule.
The USW union cheered the result. “Today’s decision proves China cheats and that U.S. trade law enforcement is an important tool that will help level the playing field for U.S. workers by requiring Chinese tire imports to be priced fairly,” said USW President Leo Gerard. “This case shows the importance of vigorous enforcement of our trade laws as a first line of defense against unfair trade practices that harm American industries and jobs.”
Germany’s Beru Group have posted sales revenue of 230.4 million euros in the first half of 2008, a 2.77 per cent growth on the corresponding period of 2007. The main sources of revenue, the company reports, were the Aftermarket segment and the Electronics and Sensors division. Profit from ordinary activities (EBIT) reduced 35.2 per cent due to one-time special items and amounted to 15.8 million euros. Excluding the special items, adjusted EBIT amounted to 23.1 million euros, equivalent to an adjusted margin of 10.0 per cent. Beru’s profit of 12.3 million euros during the period was also lower than in the first half of 2007, when profits of 18.5 million euros were achieved.
In response to recent figures that show North Staffordshire to be the worst performing region for new business development and start-ups, Michelin Development has issued a challenge to companies in the area to become more entrepreneurial.
Newly released statistics from Michelin Development Ltd – the business development arm of Michelin Tyre Plc – show the North Staffordshire region to be the lowest ranking of the four regions – East Lancashire, Dundee and Ballymena – where the Michelin Development fund is available to firms. Having only two years ago accounted for 48 per cent of all the jobs created through investment assistance from the Michelin Development fund, North Staffordshire now finds itself in alarming decline with no new loans or jobs created in 2008.
Akron, Ohio received the good news yesterday that Bridgestone will build its new Technical Centre facility in the city, meaning that the 600 jobs already stationed in the area will remain situated in their current location.
Workers had waited with bated breath for the Bridgestone search team to make its move in recommending the placement for the new building since the shortlist was cut down to two candidates – the other possibility being to move the work near to Nashville, Tennessee in Murfreesboro – a month ago.
Michelin & Cie shares fell 4.8 per cent on July 28 following a published report that the tyremaker’s first-half earnings have failed to meet management targets. Shares fell 2.31 euros to 45.49 euros, furthering the stock’s decline this year to 42 per cent and valuing the company at 6.6 billion euros.
According to a French financial newsletter, Michelin will announce cost-cutting measures at its July 30 earnings presentation, and jobs cuts will also possibly be tabled. Profits have been whittled away by weakening demand for cars in mature markets, which has made it harder to pass on raw material price increases to customers, Some analysts, including London based Adam Jonas from Morgan Stanley, have cautioned that Michelin may find it difficult to implement recently announced price increases.
This week Porsche and GM executives have added their names to the list of car makers calling for a swift conclusion to merger talks between Continental AG and takeover bidder, Schaeffler Group.
Porsche AG chief financial officer Holger Haerter was the first to come out and join Volkswagen in favour the deal, telling Frankfurter Allgemeine Zeitung he would back Schaeffler Group’s takeover bid. Haerter said the product portfolio of both companies complement each other and set out to allay fears that employees of Continental would face jobs risks as a result of the deal.
A July 21 meeting between Pirelli chairman Marco Tronchetti Provera, management from the company’s tyre manufacturing facility in Manresa, Spain and regional government officials has resulted in a deal that has reportedly secured the jobs of 280 Manresa factory employees.
On July 15 Pirelli issued a statement saying it had decided against building a new plant in the area as a result of unfavourable economic, automotive industry and tyre market conditions in the past 12 months. The company further announced it would instead restructure the current factory, opened in 1924, in order to retain its presence in Spain. This restructuring was to take the form of reducing production capacity and staffing at Manresa by 30 per cent in late 2008, and in future focusing upon higher added value products. At present the factory produces around 42,000 tonnes of passenger car and 4×4 tyres each year.
Employees at the Goodyear plant in Tyler, Texas have been given notice of further upcoming redundancies. According to Harold Sweat, president of United Steelworkers Local 746L, the redundancies will take place some time between September 22 and October 6 and include about 70 people.
Goodyear has issued a Worker Adjustment and Retraining Notification (WARN) Act notice of the layoffs, which it refers to as a “permanent separation.” This is the second WARN notice received by the Tyler plant within two months. The notice also contained a phrase saying the plant “will be permanently closed,” said Sweat.
Hopes are high that the 60 redundancies announced last week for Pirelli’s Carlisle plant could be filled by volunteers. The MP for Carlisle, Eric Martlew praised Pirelli for their continued investment in the factory despite the job cuts, revealing to local news sources that he was confident that the redundancies could be filled without forcing anyone to leave their job.
The move to cut the jobs comes as a response to decreased demand for products produced at the plant and the ability to manufacture identical items elsewhere. Pirelli released a statement promising to “strive to minimise the impact on our workforce” and that the action – alongside the company’s investment in new technology at the plant – would “help safeguard” its future.
Following the announcement that its Carlisle plant would be shedding 60 jobs – as reported here on Tuesday – Pirelli has released a statement that it has begun consultation with the site’s senior Union officials. It remarks that, as suggested on Tuesday, the declining price of commodity tyres and identical products made in lower cost countries have led to the necessity to lose 60 employees from the site, taking effect at the end of October 2008.
A spokesman for the company said that “Although difficult for all concerned, this course of action will help safeguard the future of the plant and the Company will strive to minimise the impact on our workforce. On a more positive note, we continue to invest in the Carlisle plant, with the installation of 10 new large presses and the upgrade of some building machines, to increase our capacity in large tyres. Within the next few months we anticipate signing a contract for delivery of a wind turbine, to improve our costs.”
Continental’s North American division is ready to pump US$60 million into its Illinois plant spread over the next three years. The money will go towards expanding production capacity on the facility’s passenger, light truck and commercial tyre operations. The German manufacturer will expand its workforce to the tune of 75 new jobs, increasing production by around two million tyres every year.
News sources suggest that the company will spend around two-thirds of the total figure on new machinery and tools for the fabrication of passenger and light truck tyres, while the remaining third will be spent on updating the factory’s commercial tyre building machines.
Continental AG has sharply rejected a 69.37 euros per share (roughly 11.2 billion euros) cash takeover offer from Schaeffler Group, describing it as an “opportunistic approach [that] does not reflect the full value of the company.” Continental AG was officially informed by the Schaeffler Group about its decision to make a takeover offer for the company on Tuesday 14 July and hit out publicly a day later (Wednesday). In a company statement Continental said the offer has “no convincing strategic rationale for a business combination” and that “Schaeffler is trying to achieve control over Continental in an unlawful manner.”
For the first time Continental lent its support to claims that Schaeffler already indirectly controls roughly a third of the company: “According to our analysis, the Schaeffler Group has secured access to 36 per cent of the outstanding capital of Continental in an unlawful manner – with the help of derivative positions and collaborating banks. This would result in a comfortable voting majority at the shareholders meeting and may even lead to a qualified voting majority.” According to the Financial Times, Schaeffler holds 2.97 per cent of Continental’s stock directly and has amassed the right to own an additional 32.95 per cent stake through various options. All of which begs the question, how can Continental fight off what is rapidly becoming the largest hostile takeover bid in Europe this year?
Despite press speculation that the potential takeover may result in the divestment of the tyre business, Schaeffler Group President and CEO, Dr. Jürgen Geißinger said the group’s focus is on combining the strengths of the two companies: “Schaeffler expressly supports the strategy of Continental including its tyre business.” His statement continued: “Schaeffler will not break up Continental AG. The company will continue to be listed on the stock exchange and, if possible, remain in the DAX index. Continental will remain an independent company headquartered in Hanover. No jobs will be lost in conjunction with the transaction.”
The final location of Bridgestone’s new Tech Centre – which will cost around US$100 million – is to be confirmed in “the next several weeks”, a company spokesman has told a real estate news website. The Japan-headquartered manufacturer is to decide between moving the facility, along with its 600 jobs, to office space in Tennessee near Nashville that possesses the 600,000 sq ft required, or to remain in Akron, Ohio, which would require the building of a new facility.
The state of Ohio has provided an incentive package worth $68 million to remain in the area, where the company currently inhabits a century-old office block – dating back to the company’s beginnings in Akron – unfit for the purposes of the new Centre. Staying in the area would mean building anew. The company wishes to begin work at the proposed research building in 2010.
The phrase “consolidation period” always sounds like a harbinger of doom for workers in any industry, so a new report on the UK tyre industry suggesting that this is exactly what lies ahead in the months to come can only suggest the onset of job losses in the sector.
The third annual Plimsoll Analysis, presented this week, suggests that the industry will lose 2373 jobs, in line with the UK economy’s “prolonged and bumpy landing”, which – a British Chamber of Commerce survey suggests – will see unemployment rise by 300,000. The report individually analyses the UK’s leading 200 companies, assessing their chances of survival and possible precautionary measures in the lacklustre market conditions.
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