NEW HAVEN, Conn.—Three months after announcing tentative plans to close its Hanford, Calif., tire plant, Pirelli Tire North America has made it official. The company is shutting down its last tire factory in North America effective immediately.
Pirelli officials began informing the plant's 500 salaried and hourly employees of its decision Jan. 3, with production ceasing over the next few days, a company spokesman said.
"The final decision was necessary, as we were unable to determine any possible means of averting a closure during exhaustive discussions with union representatives," the tire maker said in a prepared statement.
While production is ending, workers will receive current pay and medical benefits through April 5, 2001, to comply with a six-month closure notice. At that time, the plant will close officially.
Shutting the plant was an economic issue, the spokesman said. "The factory was not competitive in terms of costs with the rest of Pirelli's worldwide factories and compared to the rest of the industry," he said.
The tire maker had left the door open for the plant to remain viable after announcing the tentative closure on Oct. 5, 2000. But it couldn't resolve the cost issues after talking with the union, the spokesman said.
Pirelli also maintains a warehouse at the factory, which will remain open for an undetermined time. The company is in the process of transferring products to other warehouses.
Tire dealers should see no interruption in service from the company, the spokesman added. "We have adequate inventory to meet our needs."
Pirelli will source tires from parent company plants in South America and Europe, which already produced many of the same tires built in the Hanford plant. Cooper Tire & Rubber Co., Pirelli's strategic partner in North America, also will build some Pirelli lines.
Cooper took over sales and distribution of Pirelli-brand passenger and light truck tires in the U.S., Canada and Mexico two years ago through an alliance with the Italian tire maker.
Pirelli produced several different lines at the factory, including the P400 and P3000 touring tires, P4000 Super Touring and P6000 Sport Veloce all-season H-rated performance tires and Scorpion AT light truck tires. Although it had daily production capacity of 14,000 units, the plant had been averaging about 9,500-10,000 tires, the spokesman said.
Pirelli got its foothold in tire manufacturing in North America in 1988 when it acquired the former Armstrong Rubber Co., based in New Haven, for $190 million. That deal brought with it three tire plants located in Des Moines, Iowa, Nashville, Tenn., and Hanford.
Pirelli sold the Des Moines plant, which made passenger, light truck and farm tires, to Titan Wheel International Inc. in 1994. The company closed the Nashville passenger tire plant in 1996.
While shutting Hanford effectively ends Pirelli's manufacturing capability in North America, that status could be short-lived.
The tire maker expects to soon announce the U.S. site of a new original equipment and ultra-high-performance tire plant featuring its state-of-the-art MIRS (Modular Integrated Roboticized System) manufacturing process.
Pirelli S.p.A., Pirelli Tire's parent company, unveiled the new process last July in Milan, Italy. The company operates a MIRS module in Milan that can produce 125,000 tires a year and was to install a second module at the factory by February.
Among the sites under consideration is Rome, Ga., the spokesman confirmed. But he would not comment on any other potential locations.
At the July press conference, Pirelli said it intended to construct four additional MIRS facilities in Europe, the U.S. and the Far East over the next three years.
Pirelli is placing the plants in countries where it hopes to gain or to strengthen its OE position with vehicle manufacturers, Pirelli S.p.A. Chairman and CEO Marco Tronchetti Provera said at the time.
Once the U.S. MIRS site is selected, it will take a year to 18 months before production begins, the Pirelli spokesman said.