UNION CITY, Tenn. (Nov. 15, 2011) — Titan Tire Corp., a subsidiary of Titan International Inc., has bought the physical assets of the former Goodyear plant in Union City for approximately $9 million.
Titan said it notified Akron-based Goodyear of its interest in some of the equipment at Union City shortly after the tire maker closed the 43-year-old facility on July 11.
The purchase includes the 2.1 million-sq.-ft. building on approximately 480 acres of land and most of the equipment, Titan said.
Titan is most interested in the mixing equipment at Union City, which Titan Chairman and CEO Maurice Taylor Jr. said would help support the company's growth in farm and OTR tires.
“The mixing capacity with the equipment Titan purchased could allow an additional $1 billion in future sales and increase Titan's output of farm and OTR tires,” Mr. Taylor said. “This transaction happened fast, so we have a lot of work to do to see what gives Titan the largest savings.”
Titan hasn't decided how it will use the Union City plant, except as a warehouse for farm and off-the-road tires and as an equipment rebuilding operation for the machines there, Mr. Taylor said. Titan won't decide whether to keep the purchased equipment at Union City or move it to other Titan locations until mid-2012, he said.
In the purchase agreement, Titan agreed not to build passenger or light truck tires in Union City, the products Goodyear made there.
Titan said it will scrap all curing presses and tire building equipment Goodyear asks it to scrap. Goodyear has until June 2012 to remove all equipment it wishes to retain, and Titan will have immediate access to the Union City plant to inspect all Banbury mixing equipment and steel and fabric calender lines.
Goodyear declined comment except to confirm the sale.
Closing the Union City plant was the last action in Goodyear's plan, announced in 2009, to reduce its annual tire production capacity by 15 million to 25 million units. The Union City plant had an annual capacity of about 12 million tires.
The Union City facility had been particularly vulnerable to closure, because it was the only Goodyear plant in North America not covered by a non-closure clause in contract negotiations between the company and the United Steelworkers (USW) union.
A USW spokesman said the union had no immediate reaction to the Titan purchase.
“We don't know yet what Mr. Taylor plans to do,” the spokesman said.
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