Continental Tire North America Inc. (CTNA) plans to reduce tire production at its Charlotte, N.C., plant even more on July 7. The move is part of the company's on-going North American restructuring strategy.
"The reasons for this additional curtailment of tire production are high manufacturing costs at the Charlotte plant, escalating costs for energy and raw materials, and declining business conditions in the company's North American passenger and light truck tire business," say CTNA officials.
Approximately 481 hourly and salaried employees will be laid off.
"With skyrocketing costs for energy and raw materials, our ability to manufacture tires at competitive costs continues to deteriorate," says CTNA CEO and President Alan Hippe.
"At this time, our Charlotte plant has the highest manufacturing costs of any Continental tire plant world wide. At this point, we must take immediate and decisive action to reduce our manufacturing costs and return CTNA to profitability.
"Given our inability to reduce costs at our Charlotte plant, we must implement our plan to indefinitely suspend tire production in Charlotte and relocate these products to lower cost manufacturing facilities."
CTNA says it will lay off 172 hourly and salaried employees on May 12. An additional 50 salaried employees will be laid off on June 30.
CTNA plans to work with federal, state and local government officials "to provide transition assistance to the laid off employees," say company officials.
"In addition, CTNA has offered to meet with the United Steelworkers union, which represents hourly employees at the Charlotte plant, to negotiate layoff benefits for displaced hourly employees."
CTNA is seeking $32 million in cost reductions at the Charlotte plant.
Its former contract with the union expired on April 3O as the parties came to an impasse.
On March 10, the company announced it will indefinitely suspend production in Charlotte this September.