Conti to reduce Charlotte production again

Charlotte, North Carolina--Continental Tire North America Inc. will lay off 513 hourly and salaried employees at its Charlotte plant in a two-phase cutback that will ultimately reduce daily production by 12 000 units, the tyre maker said.

The first phase, affecting 241 employees, will occur on March 15, with the second phase following on June 30, affecting 272 employees. Afterward, the plant will operate with a total of 573 employees, the company said. In the first phase, production will be down 6000 tyres to 18,000 units. The second phase will draw back another 6000 units to about 12 000 tyres. A company spokesman said the cutbacks apply across the board, to passenger and light truck tyres.

"Manufacturing costs in our Charlotte facility are higher than any other Continental tyre plant worldwide," said Alan Hippe, president and CEO of CTNA. "Our overall objective is to reduce significant financial losses while expanding our market position in the North American marketplace for all tyre operations."

In June, Conti scaled back production at the Charlotte plant by about 30 percent, citing high inventories and high manufacturing costs.

Conti also is currently in contract talks with the United Steelworkers. The tyre maker wants to cut $32 million in costs from the plant.

"We want to continue to manufacture tyres in Charlotte, but global competition is putting pressure on us as our manufacturing costs are cheaper overseas," Hippe said in a statement. "Our future here and all over North America depends on our ability to increase efficiencies and reduce labour costs in our manufacturing operations."

From Rubber & Plastics News (A Crain publication)