As it promised earlier this year, tire recycler GreenMan Technologies Inc. closed its LaVergne, Tenn., tire processing plant and assigned its scrap tire collection business back to Tennessee Tire Recyclers Inc. (TTRI), the company that originally sold GreenMan that business in April 2001.
TTRI had the right of first offer in case GreenMan decided to divest its Tennessee tire collection contracts, according to GreenMan CFO Chuck Coppa. Before divestiture, GreenMan gathered about 3.5 million to 4.5 million tires annually in Tennessee, Mr. Coppa said.
The LaVergne plant, which was not part of the TTRI acquisition, was operating with a skeleton crew of two or three employees until Sept. 30 when GreenMan shuttered it completely, according to Mr. Coppa.
GreenMan will incur a non-cash loss on the transaction of approximately $918,000, but the change also will improve its cash flow by more than $150,000 monthly, the company said in a press release.
Mr. Coppa said the company also has sold its property in Wisconsin and is consolidating its Midwestern operations at its plant in Savage, Minn. It is streamlining its southeastern operations, raising prices for tire collection services where it can and dropping that business where it can't, Mr. Coppa said.
Meanwhile, Hurricane Katrina delivered a blow to GreenMan, negatively impacting the company's near-term, in-bound tire flow and performance even though the majority of GreenMan's southeastern tire flow does not originate in the hardest hit Gulf Coast areas, said President and CEO Bob Davis.
``With regional and national fuel prices rising 25 to 100 percent almost overnight, our ability to immediately pass along these signi-ficant increases to our customers is limited,'' Mr. Davis said. ``We will continue to do our best to mitigate the impact of these unfortunate events on our overall corporate performance and provide the best possible service to our customers during the coming months.''