TOKYO — Yokohama Rubber Co. Ltd. has taken an asset impairment charge against its third quarter earnings of $102 million to account for a "reassessment" of the profitability of and business outlook for its truck tire manufacturing unit in Mississippi.
In a statement on the situation with Yokohama Tire Manufacturing Mississippi L.L.C. (YTMM) in West Point, Miss., Yokohama said: "Achieving profitability at the subsidiary has taken longer than management anticipated when production began there, and management has recorded asset impairment in accordance with a prudent reassessment of the business outlook for the subsidiary and of the outlook for recovering investment there."
It did not elaborate beyond the statement.
The 1 million sq.-ft., $300 million plant opened in 2015 and today employs 665. The plant is rated at 1 million tires a year.
YTMM dismissed 29 employees this summer because they did not meet "pre-employment requirements."
In a statement, Yokohama Tire Corp. said YRC took this decision "in an effort to fulfill its responsibility to provide an updated value of assets for its shareholders."
For YTMM, its employees and customers, "the updated valuation has no impact on our ongoing, day-to-day business operations or production. YTMM is committed to producing world-class products for our valued customers and increasing production to maximum capacity.
"We continue to aggressively address the challenges of running a brand new facility and increasing production output," the statement added. "The facility has all the necessary elements for success — state-of-the-art equipment, a dedicated and highly trained workforce, experienced and skilled management — and we will continue to invest in our technology, our people and our production capabilities to meet our goals"
Separately, Yokohama cited this charge as one of the reasons it is downgrading its earnings outlook for fiscal 2018.