ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, July 25, 1996 TAG: 9607250038
SECTION: BUSINESS PAGE: C-10 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
OFFICIALS SAY MOST tire makers are overstocked. Also, the plant will be closed during the first week of August.
Yokohama Tire Corp. in Salem said Wednesday it will lay off as many as 50 employees to slow production and manage a glut of tires. It will be the plant's first layoff since the company bought the tire factory from Mohawk Rubber Co. in 1989.
The Yokohama factory is the Roanoke Valley's 12th largest employer, with 875 production workers and about 175 other personnel.
The exact size of the layoff is undetermined but, at most, it will eliminate all of 50 new jobs that have been filled at the plant in the last year, said Yokohama spokeswoman Kelly Teenor. On balance, Yokohama has raised employment at the plant, adding 500 people since the purchase seven years ago, she said.
In addition to the layoff, the plant will close during the first week of August. This will be the second of two unscheduled shutdowns this summer. The earlier lasted for three days this month. During shutdowns, workers receive 80 percent of their usual pay.
North American tire makers have produced an unusual excess of tires, Teenor said. Yokohama's competitors also are cutting production to shrink inventories, she said. The steps at the Yokohama plant are designed to cut production by 500 tires a day, to 18,500.
"The industry is just plagued with lots of tires," she said.
Later this year, Yokohama is scheduled to feel the impact of a different kind of market fluctuation - the loss of a major customer. PriceCostco, an Issaquah, Wash.-based operator of 264 warehouse-style general merchandise stores, told Yokohama in June it would stop buying Yokohama tires - many made in Salem - after 17 years. PriceCostco will wind down purchases between October and spring 1998.
Yokohama won't say how many tires the Salem factory made for PriceCostco, but said Wednesday's announcement wasn't related to that loss of business.
"We're trying to grow the business the best we can, and right now market conditions make it real difficult to expand or maintain what we're currently doing," Teenor said.
Eddie Robtison, president of United Steelworkers Local 1023, said he attributes the layoffs to general business conditions. "Business is slow right now," he said. The union represents Yokohama's production work force.
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