Pirelli Integrates Brazilian Tire Production Business
Recently, the Italian tire producers Pirelli C. & SpA plans to integrate its business in Brazil. One of its factories may be closed, and it promised to invest $136 million over the next two years.
It is reported that the “restructuring production structure” includes the transfer of motorcycle tire production from the Pirelli plant in Gravatai, Rio Grande do Sul, to its plant in Campinas, Sao Paulo The latter plant only produces automotive tire, which forms the tire industrial center for automobiles, motorcycles and racing tires, serving the Latin American market. This move could lead to the closure of the 43-year-old Gravatai plant, which produces only motorcycle tires and has 900 employees. Production transfer is expected to be completed by 2021.
Pirelli said it is working to reach an agreement with the union to ease the social impact of production transfer. This is expected to create 300 jobs at the Campinas plant. According to the company, the plant has been in existence for 49 years and is in a "good position near the production facilities of car and motorcycle manufacturers."
In addition, Pirelli is still negotiating with the Prometeon Tire Group (PTG) to “assess initiatives aimed at mitigating the impact of employment”. PTG is Pirelli's previous industrial tire business, operating truck tires and agricultural tire plants in Gravatai.
Pirelli said it will invest $136 million over the next two years at Campinas and the Feira de Santana plant in Bahia to modernize and convert standard products into high value-added tires. It is said that this investment is an addition to Pirelli's investment of $365 million in Brazil in 2013~2018.
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