Toyo Tire Corp. plans to close Toyo Automotive Parts (USA) Inc. and cease production of automotive parts at the U.S. subsidiary by Oct. 31.
The company has manufactured anti-vibration rubber and joint boots for automobile manufacturers at the U.S. subsidiary in Franklin, Ky., since 2001. Toyo says the U.S. parts business will be dissolved as a business entity.
"As a result of rising material, energy and labor costs, TAP (Toyo Automotive Parts USA) has been unable to maintain or improve its profit outlook. In order to optimize management resources, strengthen business infrastructure, and enhance the competitiveness of its automotive parts business, the company will consolidate production ... at its other global locations. There will be no disruption of supplies to our customers in North America who will continue to be served by our Toyo Tire North America OE Sales LLC subsidiary," Toyo said in a statement.
Toyo says it will waive its loan claims of $120 million from the automotive business — which is the amount of the automotive parts business' liabilities in excess of assets at the time of liquidation.
Dissolution proceedings are expected to begin by the end of November 2023. The subsidiary, which was fully owned by Toyo, had 207 employees as of the end of June 2023.
