KOBE, Japan — Citing its inability to make tires profitably at its Tonawanda, N.Y., factory, Sumitomo Rubber Industries Ltd. (SRI) has decided to close the 102-year old factory.
All production at the Tonawanda facility will cease immediately, the tire maker said, with related wind-down activities expected to be complete over the next 12 to 24 months.
All research and developoment conducted at the New York factory will remain in North America via transfer to SRI America Inc. The exact location of this transfer is yet to be determined.
At stake are roughly 1,500 jobs and millions of dollars of economic impact on the Buffalo-area economy.
"The closure follows an extended examination of the viability of the facility, following thorough analysis of various business complexities, including mounting material and logistics costs, dated infrastructure, intermittent financial performance, and changing market conditions," SRI said in a Nov. 7 news release.
"The evaluation was undertaken as part of a broader strategy to ensure the long-term sustainability of the Sumitomo Rubber Group in the competitive international tire market."
The company’s announcement, made following a board of directors meeting, details plans to dissolve Sumitomo Rubber USA L.L.C., the SRI subsidiary that oversees the manufacturing plant.
The decision to close the plant comes three years after SRI committed $130 million to upgrade and expand the facility for more value-added tires.
That project was designed to nearly double passenger and light truck tire capacity to 12,000 units per day and boost truck/bus tire capacity to 2,300 units a day from 1,600.
In a statement, SRI said: “The business environment remains severe due to the deterioration of productivity and profitability at SRUSA.”
Sumitomo Rubber North America has stated in the past that it sources 15% to 20% of the tires it sells from the suburban Buffalo plant and imports the rest from factories in Brazil, China, Japan, Indonesia, Thailand and Turkey.
SRI has operated the Tonawanda factory since 2015 when Goodyear and SRI dissolved their 16-year-old business alliance. The plant was opened in 1923 by Dunlop Tyre Ltd. Prior to the formation of the Goodyear-SRI alliance in 1999, the plant was operated by Dunlop Tire Corp., an independent entity.
Sumitomo cited combined operating losses from the New York operation of more than $325 million over the past three years and has recorded costs of $310 million in 2024 to cover actions necessary to close the factory.
The business there generated $455 million in sales revenue in fiscal 2023, SRI said.
SRI said it expects to incur additional expenses of nearly $190 million to cover costs associated with layoffs and “early termination penalties.”
Approximately 1,550 hourly and salaried employees — 1,200 union and about 350 non-union, respectively — will be impacted, SRI said, and have been formally notified.
The United Steelworkers (USW) union, which represents the 1,200 hourly workers, condemned SRI's decision, calling it a "betrayal of of its highly-skilled, dedicated workforce.”
USW District 4 Director Dave Wasiura, who represents workers in New York and eight other Northeastern states, expressed his deep disappointment in Sumitomo management and urged it to find a better solution than the abrupt closure.
“Our union has partnered with Sumitomo for years, helping to secure investments, as together we’ve navigated the ups and downs of the tire industry. That management went straight to enacting this extreme measure without coming to us is nothing short of a betrayal of its highly-skilled, dedicated workforce.”
Wasiura said the impacts of the decision will also ripple far beyond the plant itself.
“Sumitomo’s decision to wipe out these good, union jobs is devastating, not just for workers but for the entire community that they help support.”
SRI said it is working with union representatives on bargaining and equitable severance packages.
"The company intends to actively collaborate with union representation and former salaried employees on various job placement support services to help ease work force transition," the company said. Discussions with union leadership will begin Nov. 13.
Additional information can be gleaned from srusa-tonawanda-update.com, a site created as a clearinghouse for news about the closing.
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This article contains reporting by Sam Cottrill, Rubbernews.com.
