BFGoodrich to reduce production at Opelika tyre plant by Q4

Opelika, Alabama - Michelin North America Inc.'s BFGoodrich tyre manufacturing unit plans to reduce production at the Opelika, Alabama, facility by approximately 30 to 40 percent beginning in the fourth quarter.

The company cited overcapacity in the mass-market passenger tyre segment in North America as the impetus for the cutback. The segment has been shrinking over the past several years and is also experiencing intense cost pressure due to imports from competitors in lower-cost countries, BFG said.

"This is not a productivity issue," said USW executive vice president Ron Hoover. "It's about marketing and that's why we're working to secure the long-term viability of the Opelika plant by negotiating capital investment expenditures that will enable Opelika to upgrade the products it produces."

Given the glut of imports from low-cost countries such as China, companies are abandoning producing lower margin tires in North American facilities, said USWA in a statement.

The Opelika facility has the capacity to produce about 8 million units per year, according to ERJ's 2005 Global Tyre Report.

The production cutback will result in the indefinite layoff of 30 to 40 percent of the plant's employees. The facility employs about 1300 hourly and salaried workers.

Detailed planning is under way for the reductions and more specific information will be available in the coming weeks, BFG said.

The Opelika plant produces BFGoodrich, Uniroyal and private and associate brand mass-market passenger and light truck tyres, primarily for the US market.

From Rubber & Plastics News (A Crain publication)

Productivity Not the Reason BFGoodrich Needs to Reduce Production at Opelika, Says USW Press release from USWA (US)