CHONGQING, China—Giti Tire Group has suspended operations at its radial truck tire plant in Chongqing and is laying off 1,000 employees at the 57-year-old plant.
Local news reports cited environmental problems as a major reason for Giti's action, but the Singapore-based company refutes the allegations.
“This is part of Giti's overall transformation strategy under (China's) current economic conditions, not a response to environmental complaints as reported by local media,” the plant's vice general manager, Li Jianlong, told European Rubber Journal, a United Kingdom-based sister publication of Tire Business.
The plant continues to have about 100 staff on duty at the facility which Giti acquired in 2002.
It previously operated as Chongqing Zhongce Tire Co.
“Giti never skimps on environmental investments, and it's implausible to close down the plant for such issues instead of trying to solve the problem. If that's the case no plant will be left in China,” Mr. Li added.
Giti has seven tire plants in China, including the one in Chongqing. The tire maker is building a factory in South Carolina and is a minority shareholder in P.T. Gajah Tunggal in Indonesia. The company has 33,000 employees worldwide.
The Chongqing plant is rated at 1.5 million units per year but had been running at a low operational rate, according to Mr. Li. A detailed transformation plan for the plant is yet to be formed. The company also lists capacity for bias-ply motorcycle tires at the plant.
This story appeared originally in European Rubber Journal, a sister publication of Tire Business.