Titan International Inc., looking to lay a solid foundation for growth for its farm and OTR tire businesses, has acquired a Los Angeles-based maker of new tire and retread molds and is evaluating its options for rubber compounding assets at the former Goodyear tire plant in Union City, Tenn.
Titan's newest acquisition, Ohio Machine & Manufacturing Co. Inc. of Los Angeles, is focused on making molds for retreads and large to ultra-large OTR tires ranging in size from 24 to 63 inches in rim diameter, according to Michael Fike, who's heading up the company under Titan's ownership.
Titan Chairman and CEO Maurice Taylor Jr. said the firm bought Ohio Machine in order to ensure a steady, reliable source of molds to help accelerate the pace of development in its tire businesses, which are expected to top $2 billion in annual sales in the coming years.
Mr. Taylor disclosed the acquisition of Ohio Machine—along with majority control of Automation International Inc. (AII) of Danville, Ill.—during a conference call with financial analysts on Dec. 13.
Terms of the two transactions, which closed in September, were not disclosed. Titan, which owned AII from 1991-1997, did not say what share of AII it bought.
Ohio Machine, founded in 1940 in Los Angeles to supply the then-expanding tire industry in California, has been dealing with Titan for about five years and has developed some proprietary mold and curing systems for the tire and wheel maker, Mr. Fike said.
The mold maker also has a third expertise of designing and making circular molds for rubber tracks that equip large agricultural equipment, he added.
The company operates a fully equipped machine shop and steel and aluminum foundry in a 25,000-sq.-ft. facility in the Florence-Graham neighborhood south of downtown Los Angeles. Ohio Machine will continue under that name for the time being, Mr. Fike said, but eventually it will incorporate the Titan name, as well.
AII describes itself as a full engineering and manufacturing facility that designs and produces a variety of automated, flexible welding systems and machine automation. It combines the assets of three long-established firms in this business: Berkeley-Davis Co., Federal Welder and Machine Co. and Swift-Ohio Welder Co.
Separately, Mr. Taylor said Titan expects to decide by early 2012 whether to move the mixing capacity at the closed Union City plant to one or more of its three other U.S. factories or keep it in place. Adding the capacity will help reduce a mixing bottleneck the firm is facing, which is impacting its growth potential, Mr. Taylor said.
Titan has the option of keeping the mixing capacity—consisting of Banbury internal mixers and steel and fabric calendering lines—in place and operating it as a stand-alone unit, but it occupies only a fraction of the plant's 2.1 million square feet of space.
Obtaining the mixing capacity at the closed Union City plant also will allow Titan to transfer rubber calendering equipment at its Bryan, Ohio, plant to the Sao Paulo, Brazil, factory it acquired in April from Goodyear, Mr. Taylor said.
The equipment transfer would help upgrade and expand the 72-year-old Sao Paulo facility.
Titan bought the physical assets of the Union City plant Nov. 15 for about $9 million but intends to scrap or sell most of the equipment left at the facility after Goodyear removes whatever pieces it deems valuable.
Goodyear has until June 2012 to remove all equipment it wishes to retain.
The purchase includes the 2.1-million-sq.-ft. building on approximately 480 acres of land, but Titan has not yet indicated what it will do with the property. For the time being, Titan plans to use the Union City facility as a warehouse for farm and OTR tires and as an equipment rebuilding operation for the machines there, Mr. Taylor said.
Titan did not disclose the size of the mixing room at Union City, but he did estimate that the equipment in place represents sufficient rubber compounding capacity to support $1 billion in additional production of farm and OTR tires. The firm stands to recoup some of the $9 million purchase price by selling Union City's scrap machinery, Mr. Taylor added.