MILAN, Italy — Pirelli & C. S.p.A. has paused deliberations regarding new investment in its U.S. production capacity, due mainly to unresolved issues surrounding its shareholder structure.
Pirelli's announcement, issued April 11, was in response to media reports suggesting that Pirelli intended to invest $1 billion to improve output at its factory in Rome, Ga.
"The company states that the desire to increase its production capacity in that market, in line with a local-for-local strategy, has been known for some time," Pirelli said.
At the moment, however, "nothing has been decided, given the regulatory obstacles linked to questions of governance and shareholder structure," it added.
This latest announcement comes just weeks after Pirelli executives had told shareholders that it was "evaluating material investments" in the U.S. as part of contingency plans the company has drafted to address President Donald Trump administration's threats to impose elevated imports tariffs on Mexico and Europe.
Pirelli stressed that "evaluations and in-depth analyses" with Sinochem Holdings, which holds a 37% stake in the Milan-based tire maker, are still ongoing" in order to adjust the tire maker's shareholder structure.
Last month, Pirelli postponed key board resolutions and rescheduled its annual shareholder meeting, citing efforts to address U.S. market regulations.
According to CEO Andrea Casaluci, Pirelli's management is working to find "a solution that will allow the company to adapt to the new regulations of the American market."
In particular, the Washington administration is intensifying its scrutiny of and restrictions on China-linked software and hardware being used on U.S. roads.
