Titan discusses Goodyear farm tire unit acquisition
Titan International Inc.'s announced acquisition of Goodyear Tire & Rubber Co.'s farm tire division is expected to close next month, according to Titan CEO and President Morry Taylor.
The purchase includes Goodyear's farm tire plant in Freeport, Ill.
"Goodyear will keep all the legacy costs in Freeport," including retiree pensions.
"Goodyear had three options" regarding the Freeport sale, according to Taylor.
"The first, which is the most expensive, was to come up with a contract and keep everything running. Goodyear, by contract, has to have the consent of the (United Steelworkers of America)."
Taylor believes more than 90% of Freeport's workers will approve the transaction.
Other options, he says, included closing the plant and having Goodyear "off-take and manufacture everything until July 2006," when Goodyear's labor contract with the Steelworkers expires.
"If I was the union, I wouldn't challenge Goodyear on it."
On Monday, Titan announced it has agreed to acquire the farm tire unit for $100 million. The purchase will add $210 million in revenue to Titan's overall sales and gives Titan control of the Goodyear farm tire brand.
Titan plans to position the Goodyear brand as its premium-level product, with Titan a close second.
The acquisition "fits us like a glove," says Taylor. "Customers will get a much larger selection. We'll have a much faster reaction time. This is an excellent deal for Titan."
Titan officials plan to meet with Merrill Lynch this week. Lynch will be responsible for funding the purchase.
It also plans to move some tire building equipment from its factory in Natchez, Miss., to Freeport.