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Alliance Tire mulls white collar job cuts

דצמבר 24, 2009. Globes: Shay Niv

Management of Alliance Tire Company Ltd. is considering more layoffs, a year after "Globes" was the first to report a wave of layoffs at the tire manufacturer. The company has already fired 170 temporary employees, 40 employees with personal contracts, and 50 longstanding production employees covered by the collective labor agreement. It is now considering firing dozens of white collar employees and production support staff.

Alliance Tire's collective labor agreement signed with the Histadrut (General Federation of Labor in Israel) in late 2008 states that the company cannot fire employees covered by the agreement, without going through a special agreed mechanism. The complicated nature of the mechanism implies that any new cuts will be of employees not covered by the collective agreement.

Hadera-based Alliance Tire currently has about 800 employees. The company is owned by Warburg Pincus LLC unit Warburg Mergers and Acquisitions Ltd. and Indian tire maker Balkrishna Industries Ltd., owned by the Mahansaria family. The company's Indian affiliation scares many employees, who fear that tire production will be moved there. The added value of production in Israel comes from hydraulic tires, which are considered more sophisticated than regular tires, but it cannot be ruled out that the company's India's owners will narrow the sophistication gap, at which point Alliance Tire's employees' fears will intensify.

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