Titan International has cut 5% from workers' salaries after earnings halved in the second quarter, with the tyremaker forecasting a revival in many businesses may not start until late next year

The US-based group, whose clients include John Deere, Agco and New Holland, said the salary reduction had been implemented as of the start of July as the company fought back against price cuts from competitors, including its two major rivals in agriculture.

"Titan can, and will, be competitive with anyone," said Maurice Taylor, the Titan chairman and chief executive, who it taking the wage cut and a 10% take out for charity on top.

U-shaped recovery

Nonetheless, the group was expecting a worse performance in the current quarter and a long wait for recovery in many markets.

Meetings with unnamed customers this week suggested a consensus within the sector that the bottom of the downturn had been hit, and was poised for six months of stagnation before recovery.

However, Mr Taylor forecast that recovery in many of his businesses, including small tractor tyre unit, would not happen "until the general US economy picks up".

"I don't think that will happen until after the 2010 election," he added.

The US holds Senate elections in November next year.

Market reaction

In the April-to-June quarter, sales at Titan's core agriculture unit shrank by 13.7%, year on year, to $160m.

However, thanks to a deeper slide at the smaller construction division, group revenues tumbled by 23% to $42.4m.

Earnings dropped from $13.3m to $5.91m, equivalent to $0.17 a share, narrowly short of Wall Street estimates.