TAIPEI, Taiwan — Federal Corp., an independent Taiwan tire maker since 1954, lost some of that independence last year when fellow Taiwan tire maker Nankang Tire Corp. acquired a 31.4% stake in Federal, which had suffered a 72% drop in sales in 2021 in the wake of the U.S. imposing elevated import duties in 2020 on consumer tires from Taiwan.
The loss of business in the U.S. also forced Federal to close its original tire factory in Zhongli, Taoyuan Province, and consolidate all production at its remaining plant, the 7-year-old factory in Guanyin, Taoyuan.
The company took a $13 million earnings impairment to cover costs associated with the closing and earmarked $7.5 million to cover severance pay for workers displaced by the plant's closing.
The company's directors also put up for sale properties Federal held in China, including its idled tire factory in Jiangxi.
Federal posted a $67.6 million fiscal 2021 operating loss on sales of just $57.1 million.