Tokyo – Yokohama Rubber Co. Ltd. has taken an asset impairment charge against its third quarter earnings of $102 million (€90.4 million) to account for a "reassessment" of the profitability of and business outlook for its truck tire manufacturing unit in Mississippi.
"Achieving profitability at the subsidiary has taken longer than management anticipated when production began there,” said the company in a 9-Nov statement on the situation with Yokohama Tire Manufacturing Mississippi LLC (YTMM) in West Point, Mississippi.
Yokohama went on to say that the management at the plant had recorded asset impairment in accordance with “a prudent reassessment of the business outlook for the subsidiary and of the outlook for recovering investment there."
The company did not elaborate beyond the statement.
The 1 million sq.-ft., $300 million plant opened in 2015 and today employs 665. The plant is rated at 1 million tires a year.
YTMM dismissed 29 employees this summer because they did not meet "pre-employment requirements."
In a statement, Yokohama Tire Corp. said YRC took this decision "in an effort to fulfil its responsibility to provide an updated value of assets for its shareholders."
Separately, Yokohama cited this charge as one of the reasons it is downgrading its earnings outlook for fiscal 2018.
Image source: YouTube