GPX International Tire Corp. will close its solid tire manufacturing plant in Mississauga, Ontario, and move production to facilities in the U.S. and China before midyear.
More efficient factories in Gorham and Xingtai, China, along with the firm's specialty wheel facility in Red Lion, Pa., will be the primary beneficiaries, according to Troy Kline, president of the company's Solid Tire Division. The Gorham facility will be restructured to add a sizable amount of new equipment.
The company said it will lay off 96 of the 101 workers at the Mississauga site.
GPX cited a weakening market for industrial tires and strong competition from Sri Lanka for its decision. The moves will allow it to cut costs, rationalize its manufacturing operations, and compete better with entry level and imported tires, especially those coming from Sri Lanka, where the majority of off-shore industrial tires are made, Kline said.
Machinery is being purchased, and other equipment will be moved to the Gorham plant from the 60-year-old Mississauga site. About 16 employees will join the factory's work force of 64, he said. The Red Lion facility will get wheel manufacturing equipment from the Canadian operation and 10 workers will be added to its staff of 16.
By consolidating its North American operations, the company will be able to optimize production at the 58,000-sq.-ft. Maine facility and return it to a five-day work week, Kline said. The plant operates only four days a week now. The company didn't give financial details of the consolidation.
``We're maximizing our floor plan to add 12 presses, mills and other equipment'' at the Maine site, he said. ``We're refurbishing the whole plant.''
The losers in the consolidation will be the 100,000-sq.-ft. Mississauga facility, which will close and be sold this year, and most of the plant's staff. The closure ends the Malden, Mass.-headquartered company's production in Canada, but a large distribution center and other offices will remain.
The plant had been owned and operated by Industrial Tires Ltd. for decades when Maine Industrial Tires Ltd. acquired the business in 1999. ITL and Maine Industrial, which began operating in 1949, were bought by GPX in April 2006.
The five employees from the Mississauga factory being retained will move to other GPX sites. The laid-off workers will receive severance packages, and Kline said the company has hired an outplacement service to help workers transition to new jobs.
The firm has begun phasing out manufacturing at the site and expects to complete the consolidation by the end of June, although Kline indicated the move of equipment could be done as early as April.
Higher-end specialty solid tire manufacturing will be relocated to Gorham from Mississauga while commodity tire and some solid tire production will be shifted to GPX's state-of-the-art Hebei Starbright factory in China, he said.
By expanding the plant capabilities in both Maine and Pennsylvania, Kline said the firm can respond much more quickly-usually in two to three days-to specialty product orders.
The consolidation means that GPX, one of a small number of industrial tire manufacturers remaining in the U.S., can continue producing in the country while many competitors head offshore, according to Kline.