Continental Tire North America Inc. plans to reduce daily production capacity at its Mayfield, Ky., plant by 3,100 tires, or 22.1 percent, to 10,900 units.
The cutback will occur during the first two weeks of December and result in about 200 hourly job losses. Continental also will remove idled equipment and transfer it to tire facilities in Charlotte; Mount Vernon, Ill.; and San Luis Potosi, Mexico, according to a company spokeswoman.
The Continental A.G. subsidiary, which posts annual sales of about $1.6 billion, blamed the inefficiency of the Mayfield factory for the cuts, she said.
``Our tire operations have been under extreme competitive pressure for the past several years due to, among other things, escalating costs, particularly in the areas of social benefits and health insurance,'' Conti said in a news release. ``The Mayfield plant, with 1,300 employees, currently produces 14,000 tires per day and is considered CTNA's highest cost producer in North America.''
The layoffs, at this point, are ``considered permanent cutbacks,'' the spokeswoman said. The three factories receiving the equipment will pick up the production, though each of those facilities currently has some temporary production cutbacks in place to adjust inventory levels, she said.
Workers at Mayfield weren't surprised by the announcement, said Terry Beane, president of United Steelworkers of America Local 665, which staffs the factory. ``We just wondered how soon and how many,'' he said, noting that employees still hate to hear the actual news.
Mr. Beane said the union asked Continental about the prospects of more cuts at Mayfield in the future, but officials said no decisions had been made.
About 60 Local 665 members already are on layoff, he said. Some of the more senior workers may volunteer to take this layoff, because they can ``bump back'' into the work force in February, according to Mr. Beane, enabling some younger employees to keep their jobs a bit longer.
Others may be waiting to retire until after mid-contract negotiations to determine what the new pension multiplier will be, he said. Those talks were scheduled to begin Sept. 20 but have been moved back to Dec. 20 because of the length of the Goodyear master contract talks.
The Mayfield cutbacks were the second announced by Continental Tire North America in September. Early in the month, the firm said it was eliminating 100 jobs at its Charlotte headquarters as part of its plan to become profitable by 2005. The unit reported a $103 million operating loss in 2002 and is expected to be in the red again this year.