Alliance Tires in Hedera, owned since 2016 by Japan’s Yokohama Rubber Company, is poised for a major wave of layoffs and could even close, 75 years after its founding, Globes has learned. The owner is looking for cheaper production alternatives and lower shipping costs, with most of the production being exported, while costs have risen since the start of the war due to Houthi attacks in the Gulf.
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Sources familiar with the situation at the Alliance plant told Globes that the Japanese owners will soon make a decision on the future of the Israeli tire plant, which has 450 employees and has been headed by CEO Yigal Trechter for the past decade.
The factory management told Globes, “The international company has not yet made a final decision, and it is scheduled to be issued soon. When the decision is made, we will first inform the employees and then we will make an announcement.”
Alliance Tire Factory was founded in 1950 by a group of investors from Israel and the United States in cooperation with the Solel Boneh company. In 1992, after the company encountered financial difficulties, it was acquired by Eliezer Fishman from receiver and floated on the Tel Aviv Stock Exchange (TASE) the following year. After reviving the company’s fortunes, Fishman sold Alliance to Warburg Pincus in 2007 for $50 million.
The company underwent further transformation by shifting core tire production to India while Alliance specialized in agricultural tires which required more technological inputs. In 2013, Warburg Pincus sold Alliance to KKR, another foreign investment firm, for $600 million, which in 2016 sold Alliance to Yokohama Rubber for approximately $1.2 billion.
Alliance, under the name ATG – Alliance Tire Group – has developed special expertise in the manufacture and marketing of tires for agricultural, industrial, construction and landscaping machinery. At the time of its sale to Yokohama, the products were easily sold to 120 countries around the world, with a main focus on North America and Europe. Currently 20% of the company’s activities are in Israel and the rest in India. Before purchasing ATG, Yokohama Rubber did not manufacture tires in Alliance’s specialty areas and the acquisition was intended to expand the Japanese company’s product range.
Published by Globes, Israel Business News – en.globes.co.il – on November 13, 2024.
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