Published on November 21, 2013

Titan's Taylor still interested in Goodyear Amiens plant

Maurice Taylor Jr., chairman and CEO of Titan.

QUINCY, Ill.—Titan International Inc.'s on-again-off-again talks—some quite heated—with French government and union officials over the purchase of a factory in Amiens, France, are back on.

But they could end as quickly as they resumed because a number of key issues are involved, and only a few have anything to do with Titan at this point, according to Maurice Taylor Jr., chairman and CEO of Titan.

He said he has had informal discussions with Industry Minister Arnaud Montebourg recently, and he told the French official he is still open to purchasing the Amiens North factory—but only after the union representing about 1,173 workers at the site resolves its difficulties with Goodyear, which owns and is attempting to close the facility.

Taylor previously tried to buy the plant but failed to reach agreement with the union. The attempt ended in a verbal battle with the minister.

When the plant will be closed or sold is anyone's guess.

Goodyear wants to close the Amiens North factory, but a time frame for the shutdown has not been set and is subject to bargaining with employee representative organizations in the country and the European Central Works Council.

Goodyear and the union—Comite d'Etablissement d'Amiens Nord—most recently have been locked in a battle in Cleveland federal district court, where the CGT filed a class action complaint against Goodyear.

The union's class action claims the tire maker breached a contract with the CGT when it trimmed consumer tire production at the site without informing the union.

Wide divide

Goodyear and the union have been at odds during the last several years. The tire maker made several attempts to trim costs at the Amiens North facility, which makes Goodyear-brand tires, and upgrade the plant to make it more competitive in the European market. Each time, its proposals were rejected by the CGT.

Workers at another factory Goodyear operated in Amiens, however, approved the tire maker's plan, and it continues to operate under Goodyear.

Titan moved into the picture in 2010 and agreed to a tentative deal to buy the Amiens North and South plants. Taylor planned to phase out production of consumer tires in 2012 but continue producing farm tires at the Amiens North site. He offered workers a two-year guaranteed contract. They balked at the proposal, and the deal with Goodyear fell through.

In January, Goodyear said it planned to close the 54-year-old factory because of low European tire demand, increased competition from new entrants in the field and higher plant production costs. Passenger tire sales at the facility generated a loss of about $55.4 million in 2011, while farm tires were $20 million

Meanwhile, Taylor and Montebourg became embroiled in a battle of words. The French Minister of Industry leaked a private letter from Taylor to the press in which the Titan chairman and CEO said the plant's work force receives high wages but works only three hours a day.

They get an hour for both breaks and lunch, talk for three hours, and work three, he claimed.

Montebourg shot an angry, publicly released letter back to Taylor, noting that Titan is much smaller than Michelin, a French tire producer, and is 35 times less profitable than Michelin. He asked, "Are you at least aware of what Lafayette did for the United States of America?"

Knock, knock ...

That seemed to end Titan's involvement with the plant—at least until recently when apparently Montebourg and the French union said they wanted to talk. And Taylor is listening.

"They wanted to have confidential meetings," Taylor said. "We met in August. The union guys were the same ones that rejected a few minor changes in the contract. I told them I'm not meeting with the CGT without Goodyear's approval. So, we'll just sit back and see what the minister, the CGT and Goodyear do.

"Goodyear's going to win that court case. And the minister knows that if Goodyear closes the plant, there's nothing left. The minister would rather get Goodyear and the CGT together and save the business."

Taylor said if his firm purchased the plant, about 333 positions would be available—almost 75 percent less than the 1,200 employed there now—because it would strictly be a farm tire operation.

"It's basically wait and see for us," he said. "If they deal with Goodyear, then I'll move to meet with them. It's at that point we'd talk to Goodyear about buying the plant."

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