HANOVER, Germany (March 31)—Continental A.G. took a $64 million charge against 2004 earnings to cover "impairment" costs at its Charlotte, N.C., tire plant as a result of "unsatisfactory results" at that facility.
Continental did not offer any further explanation of the charge, other than to say it was related to property, plant and equipment. Morgan Stanley Equity Research said in a commentary on Conti´s earnings the charge "could imply further cost-cutting and/or capacity reduction actions."
Continental Tire North America Inc. referred all questions to Continental corporate headquarters in Hanover. When contacted, United Steelworkers of America Local 850 in Charlotte was unaware of the charge.
Conti also booked $129 million in charges related to the phase-out of tire production at its Mayfield, Ky., plant at year-end. The firm had no update on negotiations to sell its Bryan, Ohio, earthmover tire plant.