Tyremaker Titan changes track on Europe plants
Titan International, the US tyre and wheel manufacturer, is planning to nearly double the size of its European business in a bet on the continent’s rebounding economy, its chief executive told the Financial Times. Maurice Taylor confirmed that the Illinois-based group is considering the acquisition of a beleaguered tyre factory owned by Goodyear in northern France. Arnaud Montebourg, French industry minister, made Titan’s interest public this week.
Mr Taylor added that the company, which makes tyres for off-road vehicles, is also weighing bids for three additional plants in Europe in deals that would take its sales in the region from $750m in 2012 to to $1.3bn. “The thing in Europe is that there are not large farms,” Mr Taylor said. “That means you have to be able to make tyres that can go on both the fields and the roads. The opportunity for us, if we can pull it off, is to be like Apple in that market”. Mr Taylor declined to identify where the factories under consideration were located but said they were in the countries in which Titan already has operations: Germany, France, Italy, the UK and Spain. The decision to expand in Europe marks something of a volte face for Mr Taylor, who has previously been critical of European labour practices in the past, reserving particular vitriol for those of France. In February, the outspoken 69-year old, who styles himself as “The Grizz” or “Grizzly Bear” penned an excoriating letter to Mr Montebourg, in which he criticised French workers for receiving high wages for working short days. “They get one hour for breaks and lunch, talk for three and work for three,” the letter said. Mr Taylor confirmed his renewed interest in the Amiens plant, saying he had spoken with Mr Montebourg and that the two were on good terms. “He is tall, very tall; he would have made a great wide receiver [an American football position] if he was born in the US,” Mr Taylor said. He added that both men shared a common experience: running for but failing to secure the presidency of their respective countries. The European push reflects Titan’s ambition to replicate its operations in the US, where it is the third-largest manufacturer and supplier of tyres. The group supplies parts directly to agricultural and mining vehicle manufacturers. Titan generated income of $174.7m on sales of $1.8bn in 2012. “As the growth of global agriculture moves away from North America, [Titan] are setting up in places where they will be able to serve their customers going into eastern Europe and Africa,” said Larry DeMaria, an industrial infrastructure analyst at William Blair.