NASHVILLE, Tenn.-Pirelli Armstrong Tire Corp. may close its Nashville tire plant if a suitable buyer or partner is not found by the end of the year. The company notified the United Steelworkers of America on Aug. 12 it intends to close that plant ``on or after Feb. 12, 1997, at a specific time to be determined by the company.''
Franco Carini, Pirelli Armstrong vice president of marketing, said the closure posting is in accordance with the contract with USWA Local 670.
``We have three options-we can renew the notice in February, we can find a partner or we can close the plant,'' Mr. Carini said. ``The real target is to find a partner. We're just issuing this notice as a precaution so we can close the plant if we choose to do so. We're following the stipulations of the contract.''
The announcement came less than a week after a Pirelli Armstrong spokesman declared no closure notice was imminent.
Local 670 President John L. Johnson said union members are hopeful the plant will stay open.
``Pirelli told us this move won't deter any other deals that could happen,'' he said. ``Six months is a long time. This notice had to be given under the guidelines of the contract.''
Mr. Carini said if Pirelli Armstrong closes the plant, production of Armstrong-brand and other private brands of tires will be shifted to other Pirelli facilities around the world-including the firm's other North American factory, located in Hanford, Calif.
``We are still committed to Armstrong and other private brands,'' Mr. Carini said. ``But our main goal remains to find a partner to continue production in Nashville.''
Harry Millis, a tire industry analyst with Fundamental Research Inc., said Pirelli Armstrong's attempt to divest the Nashville facility is a bit of a surprise.
``That's the newer of their two plants and it's slightly larger, representing a little less than 2 percent of the industry's capacity,'' Mr. Millis said. ``It does surprise me they think they can get along with less than half the (North American) capacity they have now.''
However, Mr. Millis said the possible closure of the Nashville facility could benefit the tire industry.
``The capacity of the industry is excessive at the moment,'' he said. ``It would actually help the industry as a whole if it closed because it could possibly help reduce inventory stockpiles.''
Mr. Carini said the company's timetable to find a partner for the plant is the end of 1996.
``We want to go into 1997 as a company putting focus on Pirelli and exploiting the significant investments we've made in all areas,'' Mr. Carini said. ``This (closure notice) is one of the situations we are facing as one piece of our restructuring that we must address.''
Pirelli Group entered the North American tire market in 1988 when it bought Armstrong Tire Co. and formed Pirelli Armstrong. Since then, the company has struggled to make ends meet.
An eight-month strike in 1994 heightened tension but Mr. Johnson doesn't think that is the reason for the notice.
``Pirelli has cried to us that they were losing money since 1990,'' he said. ``I'm sure they lost money during the strike but I can't attribute this closing to the strike. Pirelli had long-term business plans to reduce the wage base of workers in all plants and this is just another step in the plan.
``The strike probably showed them that we're a pretty strong-minded group,'' he said. ``Pirelli needs to look at the fact that a plant closure notice isn't going to change that.''
``Our intention has been to invest in Hanford and grow the Pirelli name in North America,'' Mr. Carini said. ``The strike has nothing to do with this. We are actively looking for a partner to keep the Nashville plant open.''
Mr. Carini said the company wants a partner to ``share the cost of restructuring and allow us to keep a minority of the Nashville operations under our control.''
The plant, opened in 1973, has a capacity to produce 17,000 tires per day, according to TIRE BUSINESS' Global Tire Report.