As a preface to next week’s IMT issue on plants and factories, here we address the scaling back of manufacturing operations to stem losses. As a result, plants not operating at full capacity are being shut down right and left. When will it end?

Getting beat to the punch on innovation or price points is wreaking havoc on the U.S. manufacturing industry like never before. As a result, operations are being scaled back — way back — in an effort to stem losses. Plants not operating at full capacity are shutting down right and left. When will it end?

As this Newshouse News piece points out, the U.S. tire industry is currently facing a major crisis:

Rapidly rising imports of tires, especially from China, are increasing pressure on American tire makers to close more plants and cut domestic production. Passenger-tire imports, which have been steadily increasing every year this decade, topped the 100 million mark in 2005, with Chinese imports up 47 percent from 2004.

Afraid the bad news doesn’t end there. Imports have climbed 38 percent since 2000, while U.S. tire output has been steadily decreasing each year. Saul Ludwig, an analyst at KeyBanc Capital Markets in Cleveland, expects this trend to continue.

“The trend is expected to continue, given the low cost of tires made in China and tire-making costs in the United States, he said. “Imported tires, particularly from China, are much lower cost than imports from any place else.”

Passenger tire production in the United States has plummeted from 223 million tires in 2000 to 176 million in 2005, Ludwig said. Other industry watchers said consumers are postponing replacing tires as they struggle to pay higher gasoline prices which all leads to a very sluggish tire market. The Newshouse article details numerous tire plant closings including the following:

Bridgestone-Firestone has said it will close its Oklahoma City tire plant by the end of this year. It said the plant, which employs about 1,200 hourly workers, is not competitive in the global marketplace and is suffering from substantial losses.The industry is bracing for another potential shutdown as Goodyear follows up on its recently announced plans to reduce its private-label tire business in North America by a third, or by about 8 million tires annually. Ludwig said he would not be surprised to see additional closings…

Overseas competition doesn’t discriminate. This Bloomberg piece uncovers some not-so-great news about Whirlpool, the world’s largest appliance maker, whose 2Q profit fell 5 percent due to plant closings surrounding its acquisition of Maytag. Analysts seem optimistic about Whirlpool, believing that its Maytag buy will fend off Asian competitors while opening up new revenue streams at more retail outlets. Still, can’t help but grimace a little when it comes to what it takes to fend off overseas competition:

[Whirlpool] said it is shutting the Maytag plants to expand at its more efficient plants. Whirlpool plans to sell its Hoover vacuum cleaner unit, its Dixie-Narco vending-machine business, and the Amana commercial microwave and Jade commercial appliance divisions. Whirlpool said it expects it will cost as much as $260 million to close the facilities and relocate workers.

The cost of doing business in a competitive marketplace, one supposes. And truth told, it sounds like Whirlpool has a better handle on how to stay competitive than beleaguered Ford Motor Company does. This Detroit News piece paints a downright bleak future for Ford. Even though the iconic carmaker has been able to sock away tens of billions of dollars over the years, things are about to go from bad to worse, as this excerpt points out:

…only months after announcing a massive “way forward” restructuring, Ford is planning another round of deep cutbacks to be outlined in September. Workers are bracing for the worst — layoffs, benefits cuts, factory closures. In some quarters, fear and despair have replaced optimism and hope for a comeback. Rumors about the timing and severity of the cutbacks are rampant and distracting, workers say.

If that didn’t do it for ‘ya, try this on for size:

Faced with a deteriorating market position, Ford executives now say the “way forward” plan launched in January — an initiative that eliminated 4,000 salaried positions and aimed to cut as many as 30,000 factory jobs — did not go far enough fast enough.

The most telling sign that Ford is running on empty? The fact that Toyota outsold Ford for the first time in the month of July. Anyone see a recurring theme here? *cough* Overseas competition. *cough* Ahem.

Be sure to check back in next week for our IMT issue dedicated entirely to plants and factories.