Tire and wheel maker Titan International Inc. temporarily has laid off about half the employees at its Brownsville tire plant.
The action reflects the need to reduce inventories and the onset of the traditionally slow summer months.
About 90 of those laid off were temporary workers, plus 60 to 70 hourly and salaried employees, according to Maurice Taylor Jr., Titan president and CEO. The plant work force, including the temporary workers, was about 300 prior to the layoffs.
Taylor downplayed the moves, saying the company has laid off staff in the summer before, mostly because of seasonal manufacturing reductions. He plans to have two-week shutdowns at Titan's tire and wheel operations this year.
Even on the wheel side, which Taylor said has been more profitable than its tire business, production adjustments will be made at locations like the company's Quincy, Ill., facility to reduce inventories.
A flood of imports into the market has hit the Brownsville facility-which primarily makes consumer tires for all-terrain, lawn and garden and other specialty vehicles-particularly hard, Taylor said. The plant has built up enough inventory to allow for reduced production.
Quincy-based Titan's consumer tire segment had revenues of $39.8 million in 2002, down 12.1 percent from the year before. Sales fell 14.7 percent in the first quarter this year to $9.84 million.
The company had hoped to expand production in Brownsville, where only about 25 percent of the 1 million-sq.-ft. plant area is in use, Taylor said. But the market has stayed depressed longer than anticipated, and Titan has had to readjust.
Taylor said the temporary layoffs could last into the fall.
Titan's flagship tire plant in Des Moines, Iowa-which supplies Titan's primary agricultural and construction markets-employs about 550 and is running at about 70-percent capacity, Taylor said. The company's Natchez, Miss., facility has been idle since 2001.
Meanwhile, Titan's stock price has continued to slide since the company announced April 25 it could lose its listing on the New York Stock Exchange.
The day of the announcement, in which Titan said it had six months to get its share price back above $1, the stock closed at 93 cents per share. On May 28, the share price closed at 70 cents.
The NYSE requires a company's common stock to trade at a minimum average share price of $1 over a 30-day trading period. Titan shares have closed below $1 every day since Feb. 3.