Pensler Capital Corp., parent of specialty tire maker Denman Tire Corp., may be ready to strike a deal with Continental Tire North America (CTNA) Inc. to buy Conti's off-the-road tire plant in Bryan, Ohio.
Pensler and Charlotte-based Conti signed a letter of intent for the plant Jan. 16 after holding informal talks over the past few months, according to Rick Holcomb, CTNA's legal counsel.
A sale is contingent upon New York-based Pensler reaching a deal with the United Steelworkers (USW) as required by the successorship clause in Conti's collective bargaining agreement with the union. Mr. Holcomb said that if negotiations go well with the union, Conti hopes it can close on a sale to Pensler by the second quarter.
Pensler President Sanford Pensler met with union officials Jan. 25 in Columbus, Ohio, in what John Bowling, chair of the USW's Bryan Local 890L, described as a ``meet and greet'' affair. Neither party offered any proposals, Mr. Bowling said, but they plan to begin negotiating in two weeks in Bryan.
Mr. Pensler could not be reached for comment by Tire Business' Jan. 26 presstime. Mr. Bowling said a Denman human resources official accompanied Mr. Pensler to the first meeting.
Jim Pearl, Denman's senior vice president of sales and marketing, couldn't say how much of Denman's business comprises OTR because the company doesn't separate the construction and industrial tire categories.
Denman's Leavittsburg, Ohio, plant produces an estimated 2,600 units per day of auto, light truck, agricultural, earthmover/OTR, industrial and racing tires, according to company data.
``Our Denman business is actually doing pretty well,'' Mr. Pearl said. ``Last year it did great and this year it's off to a good start.''
He added that the Leavittsburg plant's large tire capacity is nearing full production. ``As for the import part of our business (from China), we have the capacity there, it's just getting the tires over here fast enough,'' Mr. Pearl said.
The Bryan facility has a production capacity of up to 245 units per day and is making 190-200 units daily, according to Rick Ledsinger, Conti's vice president of human resources.
Conti has tried to sell the Bryan OTR plant, which employs 267 unionized workers, for the past year as part of its plan to return to profitability in North America by exiting high-cost manufacturing facilities. The tire maker recently said it will halve production at its Charlotte plant and lay off 513 workers. At the same time, it will invest up to $70 million in its Mount Vernon, Ill., passenger and light truck tire plant while seeking some wage concessions there.
Reaching a contract acceptable to the union was a huge stumbling block for Dortmund, Germany-based RÃ¶sler Group, the Conti factory's first prospective buyer. Eager to enter the U.S. OTR retreading market, RÃ¶sler created a U.S. arm called Rodos Giants L.L.C., which partnered with Titan International Inc. last August to try to acquire the Bryan facility. But the companies could not close a deal.
During this stalemate between the union and RÃ¶sler/Titan, Mr. Pensler had expressed interest in the plant to Conti.
Mr. Ledsinger said Conti and Titan have not discussed a sale for a couple months, and Titan never had any exclusive agreements with Conti.
At one point, stalled negotiations between RÃ¶sler and the USW caused Conti to file an unfair labor practice grievance last summer against the union with the National Labor Relations Board. The union then filed a counter grievance against Conti. The parties since have been waiting to see if their grievances will go to arbitration, Mr. Bowling said.
However, Mr. Bowling said the union is excited to sit down with Mr. Pensler and see if the parties can come to terms on an agreement. He acknowledged that he likes the idea of an American firm buying the Bryan facility. ``Myself, I kind of like it better that way, though I don't know if it makes a difference.''