TEXARKANA, Ark. (Dec. 17, 2008)—Cooper Tire & Rubber Co. has decided to shut down its Albany, Ga., tire plant, which employs 1,400, following a capacity study of its four U.S. facilities.
The company said the closing will result in $150 million to $175 million in restructuring charges, and annual savings of $75 million to $80 million. The facility will shut down during the next 12 months.
Cooper said it will realign the mix of products from Albany to its remaining three plants in the U.S. to meet customer demand.
The decision to close the plant means the tire maker will keep open factories in Findlay, Ohio; Texarkana, Ark.; and Tupelo, Miss.
Union workers in Findlay voted recently to accept a pay cut. In Texarkana, the union voted to scuttle its current contract in favor of one in which workers would freeze salaries and make other concessions, according to an unconfirmed report from the Associated Press.
Cooper CEO Roy Armes said the study was fair, objective and conclusive, and various government and community agencies offered a high level of support, although the outcome was conclusive.
The Albany plant originally was a Firestone facility, which the company closed in 1986.
Cooper's decision to close the passenger and light truck tire plant me “pretty clear-cut” after the company studied the total costs of the facility vs. its other three U.S. plants, according to Curtis Schneekloth, Cooper director of investor relations.
Schneekloth declined to quantify those costs, citing competitive reasons, but said Cooper looked at the “big picture” including shutdown costs, labor costs, local incentives, operational costs and fixed costs.
The shutdown and production cuts will occur in phases, and most of Albany's capacity will be transferred to Cooper's other factories. The plant's capacity is estimated at 22,700 units per day.
There is also possibility that some of Albany's capacity will be transferred to the company's plant in El Salto, Mexico, he said.
Schneekloth declined to comment on how much capacity Cooper is taking away, saying it will depend on market conditions.
Cooper has established a transition center in Albany to help laid off employees with job placement, he said. Some salaried workers could potentially transfer to other plants.
“We're deeply regretful that it had to come to this,” Schneekloth said. “It's a part of our family and it really hurts that we had to do this, but it's the necessary course of action for us at this time.”