NEW HAVEN, Conn.—Pirelli Tire North America Inc. will spend $141 million to set up its first U.S. Modular Integrated Roboticized System factory, to be located in Rome, Ga.
The tire maker could announce new original equipment contracts in the U.S. within the next quarter, which would be the Italian-owned firm's first such pacts in this country, a company spokesman said.
Pirelli will install four or five MIRS production modules in the Georgia factory—as yet not constructed—starting in 2002. "Then the plan is to add four or five modules per year after that, up to a total of approximately 17," the spokesman said.
The new factory will create 305 jobs in the area over the next several years, producing both OE and replacement tires for the U.S. market, the tire maker said. Each module is capable of producing approximately 125,000 tires per year.
The land already has been cleared at the Rome site, the spokesman said, but Pirelli has not released a timetable for construction of the 400,000-sq.-ft. plant, which also will house administrative and research and development teams.
The site is part of Pirelli's plan to install 80 MIRS lines in Italy, Germany, England and the U.S. over the next few years with a total investment of about $500 million.
The tire maker already has a MIRS module running at its Milan, Italy, factory with a second being installed there, and is setting up additional MIRS production units at its plants in Breuberg, Germany and Burton-on-Trent, England. The spokesman confirmed Pirelli currently is in testing with at least one unspecified European auto maker for the MIRS tires produced in Milan.
Pirelli's MIRS processes are based on the concept of highly flexible "mini factories" that can be strategically located according to market demand, Pirelli said. The location of the MIRS plant in Georgia is indicative that Pirelli will court European car makers that have set up manufacturing facilities in the southeastern U.S., the spokesman said.
But Pirelli also plans to market its ultra-high performance tires for fitments on special edition models of American sports cars such as the Ford Mustang, he said. Pirelli does not currently have any contracts in hand for MIRS production, "but it's something that we are working on," the spokesman said.
The tire maker on March 1 opened an OE sales office in the Detroit area. "We are aggressively pursuing new contracts with a number of the major car companies based in Detroit," Carlo Bianconi, president and CEO of Pirelli Tire North America, said in a written statement. "Our progress so far has created a need to be in contact with these companies practically on a daily basis. We fully expect our strategy to gain OE market share in North America to begin to show positive results very soon."
Pirelli closed its sole U.S. plant in Hanford, Calif., on Jan. 4, stating that from a cost standpoint it was not up to the standards of representative plants of the tire group.
With the closure, Pirelli transferred production of the 9,500 passenger and light truck replacement tires made daily at Hanford to its plants in Europe and South America.
Pirelli will not shift that production back to the U.S. when its Rome site is completed, as the new factory will make "completely new products," the spokesman said. "We are very confident that we're going to have some news (on new contracts) very shortly,. probably within the next quarter."
Despite a decade of hardship in the U.S., the construction of a new plant in the country is a show of Pirelli's commitment to the U.S. market and to succeeding in it, the spokesman said.
"We feel our difficulties are behind us," he said. "In spite of those difficulties. we've been able to maintain our leadership position in the UHP (ultra high performance) market."