Following an earlier plan to lay off workers at its Brownsville tire plant, Titan International Inc. has gone a step further in an attempt to reduce inventories there-deciding to curtail production at the factory for the next three to four months.
The May 30 announcement comes on the heels of a round of layoffs that cut the facility's 300-strong work force by more than half. The production shutdown will affect about 130 salaried and hourly employees.
The curtailment will take place within the next few weeks, Operation Manager David Fines said. Workers will be placed on a recall list and brought back as needed by seniority, he said.
``We have excellent employees here,'' he said. ``It's not something we want to do.''
About 12 workers will stay employed at the facility during the manufacturing shutdown to operate the warehouse there, he said.
Ongoing economic problems and a flood of Chinese imported tires into the market have adversely affected sales of tires made at the Brownsville facility, which primarily produces consumer tires for all-terrain, lawn and garden, and other specialty vehicles.
Titan President and CEO Maurice Taylor Jr. said after the first layoffs that the plant had built up enough inventories to allow for reduced production. Now the high inventories will be needed to sustain the company until production lines are reopened.
Initially, he had downplayed the layoffs, saying the company has laid people off in the summer before, mostly due to seasonal manufacturing reductions. The company also has had recent layoffs at its Des Moines, Iowa, flagship tire plant-serving the agricultural and construction markets.
Even on the wheel side, which Mr. Taylor said has been more profitable than its tire business, production adjustments to reduce inventories have been made at locations like the company's Quincy, Ill., facility.
Quincy-based Titan's consumer tire segment had revenues of $39.8 million in 2002, down 12.1 percent from the year before. Sales fell 14.7 percent in the first quarter this year to $9.84 million.
The company had hoped to expand production in Brownsville, where only about 25 percent of the 1 million-sq.-ft. plant area is in use, Mr. Taylor said. But the market has stayed depressed longer than anticipated, forcing Titan to readjust.
The company's Des Moines plant, which employs about 550, is running at about 70-percent capacity, according to Mr. Taylor. Titan's Natchez, Miss., facility has been idle since 2001.
Meanwhile, Titan's stock price has continued to slide since the company announced April 25 it could lose its listing on the New York Stock Exchange.
The day of the announcement-in which Titan said it had six months to get its share price back above $1-the stock closed at 93 cents per share. On June 3, the share price closed at 70 cents.
The NYSE requires a company's common stock to trade at a minimum average share price of $1 over a 30-day trading period. Titan shares have closed below $1 every day since Feb. 3.