As part of its ongoing North American restructuring plan, Continental Tire North America Inc. (CTNA) will close its Mayfield, Ky., facility in approximately six months.
The company cited two reasons for the closure:
* declining business conditions in its original equipment passenger and light truck tire business to its automotive customers;
* escalating costs for energy and raw materials.
"Although we have seen recent improvements in our manufacturing costs and replacement business, we must continue to implement measures to reduce our costs and return CTNA to profitability," says CEO and President Alan Hippe.
The Mayfield facility produces products for other CTNA tire facilities and does not produce tires. (CTNA "indefinitely" suspended tire production at the plant at the end of 2004.) Its closure will not have any impact on customers, according to the company.
CTNA plans to work with federal, state, and local government officials to provide transition assistance to the laid-off employees. In addition, CTNA has offered to meet immediately with the United Steelworkers union to negotiate layoff benefits for displaced hourly employees.
"It was obvious to us long ago that Continental decided to abandon U.S. production," says USW Executive Vice President Ron Hoover. "Their business strategies and management teams never addressed the dynamics of this market, and unlike other successful companies, they refused to develop a collaborative relationship with us."
The closure will result in the layoff of close to 150 hourly and salaried employees. The Mayfield plant once employed 2,400 workers, according to the USW.
USW Local 665 President Terry Beane says he plans to meet with Conti representatives as soon as possible to conduct effects bargaining as a result of the announced closing.
The USW represents 850,000 hourly workers in the U.S. and Canada. Some 70,000 are employed in the tire, rubber and plastics industry.
