South Korea’s second-largest tiremaker Kumho Tire Co., struggling to normalize under new ownership, has decided to temporarily shut down factory lines to cope with reduced workload.
The company said Tuesday it plans to idle production at its plants in Gwangju, Gokseong and Pyeongtaek in July and August.
The three plants would initially halt operations from July 19 to 22. In the case of the Gokseong plant, the passenger car radial (PCR) tire lines would be idled while the truck/bus radial (TBR) tire lines would operate normally during the period.
Additionally, the Gwangju and Gokseong PCR lines would be halted on July 30-31 and August 6-7. The Pyeongtaek plant would suspend the production on July 31 and August 6-9. The Gokseong TBR line would be off on August 6-7.
Kumho Tire said it is moderating output in response to weakened demand from Europe. Its Chinese subsidiary also has been grappling with falling sales, partly leading the company to report an operating loss of more than 150 billion won ($134.4 million) last year. In early April, management and labor agreed to temporarily halt production to adjust to slowing demand.
Following the announcement of the production reduction plan, Kumho Tire’s labor union has immediately demanded management to take more decisive action to make up for the loss of work.
Qingdao-based Doublestar Tyre completed its acquisition of Kumho Tire earlier this month. After a failed first attempt, the Chinese tiremaker was finally cleared to buy a controlling 45 percent stake in its larger Korean rival for 646.3 billion won.
Shares of Kumho Tire closed Tuesday up 0.16 percent at 6,450 won.
By Kim Jung-hwan and Kim Hyo-jin
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]