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Toyo seeks relief vs. GTY joint venture partners

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Toyo seeks relief vs. GTY joint venture partners

Toyo Tire U.S.A. Corp. seemingly has been bounced from its GTY Tire Co. truck and bus tire manufacturing joint venture with Continental Tire the Americas LLC and Yokohama Tire Corp. But that's just the start of its worries.

Toyo is seeking injunctive relief against Continental and Yokohama, accusing the firms of "depriving Toyo of its agreed-upon share of truck and bus tires," according to documents submitted to the U.S. Court of Appeals for the Ninth District, based in Los Angeles, Calif.

Toyo ordered nearly 290,000 truck and bus tires from the GTY plant, which was established 22 years ago in Mt. Vernon, Ill. (The company obtains more than 60% of its North American market truck and bus tires from the factory, according to court documents.)

"Toyo cannot replace GTY as a supplier. No viable alternate suppliers exist in the United States, and it would take approximately eight months to two years for any overseas supplier(s) to increase (their) production. Moreover, even if such increase was feasible, it would not account for the 290,000 units that Toyo expected from GTY."

The GTY plant has the capacity to produce 7,300 truck and bus tire units per day, according to MTD's 2010 Facts Issue, published this past January.

Toyo also is protesting its apparent dismissal from GTY. Toyo claims that "article 15 of the partnership agreement (between it, Continental and Yokohama) provides that GTY may not be dissolved but for a few enumerated events.

"In addition, the partnership agreement contained a 'soft landing' provision, pursuant to which a 'departing partner' could purchase TBRs based on a declining schedule so that its business would not be interrupted if it was terminated from the partnership. None of the triggering events has occurred."

Donna Melby, Toyo's attorney, recently told www.moderntiredealer.com that Toyo's position "is that it belongs in the partnership." The company is waiting for a ruling on the injunction request, which "is under submission now."

When approached for comment by www.moderntiredealer.com, a spokesperson for Continental verified that there is a lawsuit, but declined to comment further. A Yokohama spokesperson said it was not "at liberty to discuss the matter" due to corporate policy regarding comment about litigation.

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