A major New York tire factory that has operated for over a century is set to close after its executives moved its manufacturing overseas.
Sumitomo Rubber USA, which owns tire maker Dunlop, fired 1,550 people this week as the Japanese company plans to close its Buffalo factory.
Read More:- Goodbye to these bills: stores and restaurants to reject these dollars in December 2024
The company did not announce plans at the same time to open a new factory, but said it made the ‘difficult decision’ because the New York manufacturer couldn’t keep up with overseas prices.
‘The plant closure is primarily due to overall facility performance within the increasingly competitive international tire market,’ Sumitomo said in a statement to Cycle News.
‘This difficult decision follows a multi-year analysis of the company’s financial situation and general market conditions.’
Read More:- Rupee holds ground; cenbank intervention counters outflows, dip in Asia FX
Sumitomo said it has spent a staggering $140 million in recent years to modernize the plant, but the investment was not enough to rescue its struggling bottom line.
Local lawmakers in the region quickly slammed the move and claimed the local government could have stepped in to save the jobs before they were lost.
‘It appears this decision was made by the Japanese owner’s board without any discussion with local and state officials about the possibility of closure,’ Erie County Executive Mark Poloncarz said in response to the news.
Read More:- Warren Buffett: 6 Best Pieces of Money Advice for the Middle Class
Poloncarz claimed that Sumitomo made no efforts to halt the closure of the factory through the local government.
Read More:- Hedge Funds Shorting Tesla Just Lost More Than $5 Billion
‘At no point did Sumitomo ask for any additional assistance to remain in operation, despite the fact we have always supported their efforts to succeed here in Erie County with tax incentives and assistance through the Erie County Industrial Development Agency,’ he said.
New York Congressman Nick Langworthy, whose district encompasses part of the affected Buffalo area, said he was ‘gravely disappointed’ to hear the news.
‘I mean, it comes as a shock,’ Langworthy said.
‘This is gonna really sting here for our regional economy.’
The factory also manufactures Falken automotive tires, and is the official tire supplier of the MotoAmerica Championship and the Progressive American Flat Track Championship.
It was opened in 1923, and Sumitomo took full control of the factory when its parent company entered into a joint venture with Goodyear Dunlop Tires North America in 2015.
According to Cycle News, the sudden closure came as a ‘surprise’ to the thousands of unionized workers in the factory.
Sumitomo said it had made efforts to save the plant by trying to find a buyer for it, but when it received no offers, the closure was inevitable.
