AMSTERDAM, Netherlands-Pirelli Armstrong Tire Corp. recorded a loss in operating profits last year because of a strike-induced 9-percent drop in tire production and the loss of sales from the divested farm tire unit in Des Moines, Iowa, the tire maker's parent firm said.
Despite the sale of the farm tire business and a reduction in employees and related overhead, Pirelli Armstrong was 11 percent deeper in the red on an operating basis, falling to $21.4 million, according to Pirelli Tyre Holding N.V.'s annual report.
Pirelli Armstrong's sales dropped 25 percent last year to $393 million.
The sales decline was particularly disheartening for Pirelli because the North American market for car tires rose 4 percent last year to 236.4 million units, the firm said. ``Our local operations ... were not in a position to grasp these growth opportunities due to the ongoing industrial dispute and plant strikes,'' the annual report said.
While overall sales were off, demand for Pirelli performance tires increased 12 percent, the company said, on par with previous years' performances.
The North American sales drop was more than offset by an improved performance in Latin America, where sales increased nearly 21 percent to $728.5 million, and operating earnings jumped 39.5 percent to $33 million.
Pirelli Tyre listed tangible fixed assets of $24.7 million to cover the sale of the Des Moines plant and Richmond Converters Inc. The firm also increased its financial fixed assets by $17 million to reflect ownership of 1 million shares of Titan Wheel Inc. preferred stock, acquired in the sale of the Des Moines factory to Titan.
Overall, Pirelli Tyre reported a $2.2 million net group profit on sales of $3 billion. The net result, though, was $19 million in the red because of earnings distribution to minority shareholders in Turkey and Brazil.