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Mass job losses as major factory owner moves business overseas

by DD Staff

November 23, 2024

Mass job losses as major factory owner moves business overseas

key takeaways

After its executives relocated its manufacturing overseas, a large tire factory in New York that has been in operation for more than a century is scheduled to close.

As the Japanese business prepares to close its Buffalo plant, Sumitomo Rubber USA, the owner of tire manufacturer Dunlop, laid off 1,550 workers this week.

The firm stated that it made the "difficult decision" because the New York manufacturer was unable to compete with prices abroad, but it did not reveal plans to construct a new plant at the same time.

'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.'

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.

Poloncarz claimed that Sumitomo made no efforts to halt the closure of the factory through the local government.

'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.