MILAN—Pirelli C. & S.p.A. is planning to consolidate its operations in Brazil, with one possible plant closure and the commitment of $136 million in investments over the coming two years.
The "reorganization of production structure" would involve the transfer of motorcycle tire production to Pirelli's plant in in Campinas, Sao Paulo — which currently manufactures car tires only—from its plant in Gravatai, Rio Grande do Sul, thus creating an industrial hub for car, moto and motorsport tires to serve the Latin American markets.
The move likely would result in the closing of the 43-year-old Gravatai plant, which manufactures motorcycle tires only and employs 900. The transfer of production is expected to take until 2021.
The Italian tire maker said it is committed to finding an agreement with unions to mitigate the social impact of the transfer of operations. The move is expected to create 300 jobs at the 49-year-old Campinas factory, which Pirelli said is in a "favorable position closer to the production of facilities of car and motorcycle makers."
The company also is in talks with Prometeon Tyre Group—the former Pirelli industrial tires business that operates a truck and farm tire plant in Gravatai—to "evaluate actions aimed at mitigating the effect on employment."
Pirelli said the $136 million in investments will go toward modernizing and converting production to high value-added tires from standard products over the coming two years at the Campinas, and Feira de Santana, Bahia, plants.
The investment, according to Pirelli, is in addition to $365 million Pirelli has invested in Brazil during the 2013-18.
Gravatai is a municipal district near Porto Alegro in southern Brazil, some 700 miles south of Sao Paulo.