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CTNA, charlotte plant, lay offs, tire production, suspension, union, negotiations, september NewsCTNA, charlotte plant, lay offs, tire production, suspension, union, negotiations, septemberCTNA Announces Suspension at Charlotte Plant
CTNA, charlotte plant, lay offs, tire production, suspension, union, negotiations, september
CTNA Announces Indefinite Suspension of Tire Production at Charlotte Plant

CHARLOTTE, NC (March 10, 2006) -   Continental Tire North America, Inc. (CTNA) today announced that tire production at the Company’s Charlotte, North Carolina, manufacturing plant will be indefinitely suspended on or about September 15, 2006, unless an agreement is reached with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) to significantly reduce manufacturing costs at the plant.  If the indefinite suspension of tire production is implemented, approximately 478 hourly and salaried employees at the Charlotte plant will be laid off.  High manufacturing costs were cited as the primary reason for the announcement. 

“Today’s announcement regarding the indefinite suspension of tire production in the Charlotte plant is part of our comprehensive restructuring plan to reduce our manufacturing costs and improve the overall performance of CTNA’s North American passenger tire business,” said Alan Hippe, President and Chief Executive Officer of CTNA.  “Due to skyrocketing costs for energy, raw materials and health care, CTNA cannot continue to operate the Charlotte plant with our current manufacturing cost structure.  Because we have so far been unsuccessful in restructuring our labor agreement with the union to significantly reduce manufacturing costs, CTNA must take immediate steps to reduce its costs.” 

In the announcement, CTNA emphasized that the Company does not plan to close the Charlotte plant but will continue certain operations such as rubber mixing, calendering, puncture sealant and warehousing to support the Company’s remaining manufacturing facilities.  CTNA estimates that approximately 200 employees will remain working in the plant if tire production is suspended. 

Notwithstanding the announcement today, CTNA will continue its efforts to negotiate an agreement with the USW to reduce manufacturing costs and alleviate the need to lay off workers in Charlotte.  Since October 20, 2005, CTNA and the USW have been in negotiations focused on reducing manufacturing costs at the Charlotte plant by at least $32 million per year.  CTNA has already presented four different proposals to the USW in an effort to achieve the reductions.  The USW has not agreed to any of the Company’s proposals and has so far been unwilling to offer anything near the manufacturing cost reductions sought by the Company.  The union presented their second proposal yesterday.  The union could not provide any cost calculations and admitted they did not know the cost savings of their proposal but that it fell far short of the manufacturing cost reductions needed by the company.

“I want to emphasize that the announcement we made today is not irreversible,” Hippe continued.  “However, we must reach an agreement with the union that reduces our manufacturing costs in the Charlotte plant and makes the plant competitive with other Continental tire plants worldwide.”

About Continental Tire North America, Inc.

Continental Tire North America, Inc. (www.continentaltire.com), based in Charlotte, is a group company of Germany-based Continental AG, a leading systems supplier to the automotive industry.  Continental Tire North America, Inc. has almost 6,500 employees and operates 6 plants in North America.  It is a major supplier to the original equipment and replacement tire markets, selling Continental, General, Euzkadi and private brands.



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CTNA, charlotte plant, lay offs, tire production, suspension, union, negotiations, september CTNA, charlotte plant, lay offs, tire production, suspension, union, negotiations, september
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