Titan puts Freeport plant on 'rolling shutdown' schedule

ERJ staff report (TB)

Freeport, Illinois -- After laying off 83 in Freeport, Titan International Inc. plans to reduce the plant to minimum staffing and a production schedule of six weeks on/two weeks off until its labour agreement with the United Steelworkers (USW) expires in 2010.

Titan Chairman and CEO Maurice Taylor Jr. said the moves are necessary because of Freeport's unprofitability and “prohibitive” labour costs. In particular, he noted a 2008 arbitration ruling in which Titan was told to hire back employees that had been laid off since Goodyear owned the facility, but at the same compensation level as current Titan workers.

The labour ruling came after union members at Freeport filed a grievance against Titan for hiring the former workers back at lower wages.

Mr. Taylor said he held a November meeting with both Local 745 and national USW leaders in Dubuque, Iowa, and discussed his plans to reduce Freeport's employment and production in 2009, citing soft market demand for agricultural and industrial tyres and the facility's cost structure. He said he is transferring jobs from Freeport to Titan plants in Des Moines, Iowa, and Bryan, Ohio.

“By contract, you cannot just have layoffs, you have to do a rolling shutdown,” Mr. Taylor said. “So I'm going to follow (the) contract and work will be transferred, and we will be spending no capital in Freeport.”

Titan's pact with the union expires Nov. 15, 2010, and Mr. Taylor said he will continue the rolling shutdown (six weeks on/two weeks off) until then. The minimum employment level allowed by the agreement is approximately 480, and he said he wasn't sure if the facility has reached that level.

He said that under the company's labour agreement with the union, he can change the production schedule to a “rolling shutdown” and plans to keep it that way from now until the contract expires.

The Freeport plant makes an estimated 10,000 units per day, and 75 percent of its capacity goes to original equipment business, according to Local 745 President Steve Vanderheyden. Titan acquired the plant from Goodyear in 2005.

From Tire Business (A Crain publication)