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March 01, 1999 01:00 AM

TITAN BUYS DES MOINES PLANT

Brad Dawson Crain News Service
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    DES MOINES, Iowa—Titan International Inc. settled some unfinished business with Pirelli Tire North America in January by buying the Des Moines agricultural tire plant operated by its Titan Tire Corp. unit and resolving two legal disputes. Titan bought the tire-making assets in Des Moines when Pirelli exited the agricultural tire market in 1994, but had been leasing the plant from Pirelli. The purchase completed in January includes the building, land and any equipment Titan didn't already own, said Maurice Taylor Jr., Titan International president and CEO.

    Titan officials had said the asking price for the plant was $7 million, but Titan Tire President Gary Carlson said the company ended up paying slightly more.

    The ownership of the plant was considered an important issue during contract negotiations with United Steelworkers of America Local 164, whose 670 members went on strike May 1, 1998, in Des Moines.

    Union members were concerned the plant might close or be sold because Titan was building a new agricultural and off-the-road tire facility in Brownsville, Texas. But Titan said even before the strike began, it planned to buy the facility in Des Moines and squelch the job-security issue.

    ``We said we were going to do it and did,'' Mr. Carlson said. ``This is something the workers didn't have to worry about then and don't now.''

    The companies also settled two lawsuits, one regarding payment of medical benefits to Des Moines plant retirees and one involving trademark infringement, to avoid further legal action.

    Titan lost Illinois federal court decisions in both suits in May 1998. In the retiree benefits case, the court said Titan was contractually liable for $70 million in medical funds as part of the 1994 purchase agreement in Des Moines.

    In the trademark infringement case, Pirelli claimed in a 1996 suit that Titan violated an ageement regarding the sale of Pirelli-brand tires it produced. Titan manufactured farm tires for Pirelli in Des Moines after the plant sale, with the understanding that they were to be sold only in North America.

    But Pirelli alleged in the suit that some Titan-produced Pirelli tractor tires, specifically the P-360, P-500 and P-700 models, were shipped to Europe without Pirelli's prior consent.

    Pirelli had no comment on the agreement or the plant sale, and Titan had not divulged any details at press time.

    Titan still is dealing with strikes in Des Moines and at its tire plant in Natchez, Miss.

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