QUINCY, Ill. (Dec. 16, 2011)—Titan International Inc. will decide by early 2012 whether to move rubber compounding assets at the former Goodyear tire plant in Union City, Tenn., to one its three tire factories in the U.S., according to Chairman and CEO Maurice Taylor.
Adding the mixing capacity at the closed Union City plant to Titan's captive compounding capacity at its other factories will help reduce a mixing bottleneck the firm is facing, which is impacting the company's growth potential, Taylor told analysts Dec. 13 in a conference call.
Titan has the option of keeping the mixing capacity — consisting of Banbury internal mixers and steel and fabric calendering lines — in place and operating it as a stand-alone unit, but it occupies only a fraction of the 2.1 million square feet of space under roof at that plant.
Obtaining the mixing capacity at the closed Union City plant also will allow Titan to transfer rubber calendering equipment at its Bryan, Ohio, plant to the Sao Paulo, Brazil, factory it acquired in April from Goodyear, Taylor said, which would help upgrade and expand that 72-year-old facility.
Titan bought the physical assets of Union City plant Nov. 15 for about $9 million, but intends to scrap or sell most of the equipment at the facility left after Goodyear removes whatever pieces it deems still valuable.
The purchase includes the 2.1-million-sq.-ft. building on about 480 acres of land, but Titan has not yet indicated what it plans to do with the property. For the time being, Titan also plans to use the Union City facility as a warehouse for farm and OTR tires and as an equipment rebuilding operation for the machines there,Taylor said.
Titan did not disclose the size of the mixing room at Union City, but he did estimate that the equipment in place represents sufficient rubber compounding capacity to support $1 billion in additional production of farm and OTR tires.
Titan said it will scrap all curing presses and tire building equipment Goodyear asks it to scrap; Goodyear has until June 2012 to remove all equipment it wishes to retain.
Titan stands to recoup some of the $9 million purchase price by selling the scrap machinery, but Taylor said Titan does not know at this point how much that might be.