Dive Brief:
- Automotive tire maker Sumitomo Rubber USA is closing its manufacturing plant in Tonawanda, New York, in February 2025, laying off 1,380 workers, according to a Worker Adjustment and Retraining Notification Act letter to the state.
- The first two rounds of job cuts included 1,245 employees and occurred on Nov. 11 and Nov. 15, according to the WARN letter. The remaining 135 workers will lose their jobs when the plant closes on Feb. 14.
- Parent company Sumitomo Rubber Industries is also dissolving the U.S. subsidiary, citing that tire sales at the Tonawanda facility were not profitable, according to an investor release.
Dive Insight:
Of the 1,380 workers, 1,200 were members of the United Steelworkers Local 135, according to the labor union’s press release. Sumitomo Rubber USA is working with USW representatives on bargaining severance packages, according to the company’s press release.
“Our union has partnered with Sumitomo for years, helping to secure investments, as together we’ve navigated the ups and downs of the tire industry,” USW District 4 Director Dave Wasiura said in a statement. “That management went straight to enacting this extreme measure without coming to us is nothing short of a betrayal of its highly-skilled, dedicated workforce.”
Production ceased at the Tonawanda plant on Nov. 7 and will be moved to Sumitomo Rubber Industries' 11 other global tire facilities, where products will be exported to the U.S., according to a company handout.
Sumitomo Rubber USA’s Tonawanda facility faced challenges due to the COVID-19 pandemic and rising logistics costs, according to a Q3 earnings presentation. The facility produced Falken and Dunlop brand tires, according to the subsidiary’s website.
As a result, management made efforts to try and save the plant, including cost control measures and investments in advanced machinery equipment, according to Sumitomo Rubber USA’s handout. Executives also pursued buyers for the Tonawanda plant, but received no offers.
While the parent company saw signs of recovery, it wasn’t enough to offset the U.S. subsidiary’s mounting financial losses at the Tonawanda facility, according to the presentation.
Sumitomo Rubber Industries plans to keep tire research and development in the U.S. and move it under its other subsidiary instead, Sumitomo Rubber North America. The company has yet to determine where the R&D will be located.
The U.S. tire industry has seen multiple rounds of layoffs over the past year due to lower demand. Bridgestone Americas cut 118 workers at its Des Moines, Iowa, plant as the company navigates lower demand in its agricultural tire sector. Michelin is also closing a facility in Ardmore, Oklahoma, by the end of 2025, laying off about 1,400 workers.
