QUINCY, Ill. (July 28, 2003)—Titan International Inc.'s Titan Tire subsidiary plans to halt all tire production at its Brownsville, Texas, facility and consolidate operations in its Des Moines, Iowa, plant, the Quincy-based company said.
The Brownsville plant will continue as a warehouse and distribution center, but production will be suspended until market demand requires more capacity, Titan said. Titan had curtailed production at the plant in a plan announced May 30 to shut down production for three to four months.
The majority of the costs related to the consolidation will be in the second and third quarters of 2003, Titan said, without providing figures. Titan supplies wheel and tire systems for off-highway equipment for agriculture, earthmoving/construction and consumer applications.
Titan built the 1 million-sq.-ft. Brownsville plant as part of a plan to increase production capacity before the company's 1998 labor strikes, which hurt the company's financial standing, Titan said. As part of that plan, Titan also bought bankrupt Fidelity Tire Manufacturing Co. in Natchez, Miss., which has been idled since 2001.
Titan has been increasing efficiency at the Des Moines facility since the 40-month labor strike ended and decided to consolidate all of its tire production there until it reaches full capacity, the company said.
Other negative factors for the company include agricultural and construction markets that are falling short of their forecasted growth so far this year. The 2002 Farm Security and Rural Investment Act has not significantly impacted equipment sales this year, but an increase is expected next year, the company said. Pricing pressure from imports also has hurt Titan, though it expects the weak U.S. dollar to help in that area in the next six months.
“The North American large farm equipment market has been in a slump since 1998,” said Maurice Taylor Jr., president and CEO. “For example in 1997, approximately 9,000 four-wheel drive large tractors were sold. Last year, however, there were fewer than 4,000 sold. In terms of wheels and tires, that amounts to a decrease of more than 40,000 units.”
Titan also hopes new wheels and tires developed and tested last year will generate increased sales in 2004.