While heavy duty conveyor belt producers have struggled mightily to overcome the downturn in the mining industry, most manufacturers of off-the-road tires also have had to traverse the same turbulent waters.
Recent production cutbacks, global company restructuring, dividend elimination and mine closures within the sector are affecting all regions, according to Taylor Cole, president, off the road, Bridgestone Americas tire operations.
“This is the nature of a cyclical business,” he said. “However, the lengthy period of high demand has positioned the commodity market in a territory where it has never been regarding its ability to supply product to the market.”
Because mining companies in the U.S. struggled during the last year with lower commodity pricing and over-supply, some tire manufacturers scaled back large OTR tire production.
Michelin North America Inc. suspended operations at its Starr, S.C., giant earthmover tire plant, impacting about 100 employees, at the end of last year due to slowing global demand. The factory is one of three Michelin factories globally with capacity for 63-inch OTR radials.
Titan International Inc. cited a cyclical downturn in the mining and agricultural markets for its double-digit third quarter and nine-month sales declines last year. Titan said demand for its products was further impacted by inventory reduction efforts at both OEMs and their dealers.
Weak market conditions in key sectors prompted its subsidiary, Titan Tire Corp., to put in motion plans to lay off at least 130 workers at its Bryan, Ohio, farm and OTR tire plant beginning Feb. 8. Those cuts followed a number of others put in place last year in response to the decline in the mining sector.
CEO and Chairman Maurice Taylor Jr. noted that when the market is off for two years, as it has been in terms of mining, the third year is usually flat, “and then we grab market share and move up. So I do expect business to pick up or at least be flat this year,” depending on market conditions.