Bridgestone to phase out car, LT tyres at Tennessee plant

ERJ staff report (TB)

Nashville, Tennessee - Bridgestone Americas Inc. will phase out car and light truck tyre production this year at its LaVergne, Tennessee, plant, starting in mid-March, eliminating the jobs of 543 employees at the 37-year-old factory.

Bridgestone, which cautioned workers in December this move was being considered in light of the negative economic conditions, said it will continue to make medium radial truck tyres at the plant, albeit at reduced volumes. This move will result in the furlough of 259 employees starting in mid-March, Bridgestone said.

“Based on current economic forecasts, it appears that the global economic crisis is going to get worse before it gets better,” said Steve Brooks, president, US, Canada and Monterrey Manufacturing Group, Bridgestone Americas Tire Operations. “We are not immune from these challenging times.”

Bridgestone did not say what it expects the financial impact of the action to be, nor what its cost savings might be long-term or what it might do with the equipment dedicated to passenger and light truck tyre production.

Since disclosing in December the possibility of this phase-out, Bridgestone has held discussions with the leadership of the United Steelworkers (USW) on what, if any, actions could be taken to continue consumer tyre production at that facility. Following those meetings, the union communicated with its members that it would take “massive cuts to wages and benefits” to bring passenger and light truck tyre production at that facility to a financial break-even point.

Bridgestone laid off 158 in December and will start laying off 385 additional employees - 294 hourly, 31 maintenance and 60 salaried workers - starting in mid-March. The two actions together bring the total job loss related to consumer tyre production to 543.

The next step in the process, Bridgestone said, is to negotiate with the USW the terms under which passenger tyre production will be phased out, specifically including benefits to which hourly teammates will be entitled.

Bridgestone said it will work with the union as well as local and state officials to help address the impact on the LaVergne teammates, their families and the community. Salaried teammates will receive severance benefits in accordance with company policy, including out-placement assistance. Affected employees may also be eligible for unemployment compensation from the state.

In the truck tyre area, Bridgestone will cut output temporarily by an undisclosed amount “in order to better align truck tyre inventory with (reduced) demand.” The layoffs will affect 191 hourly, 34 maintenance and 34 salaried employees. The company will keep 700 workers on the job building truck and bus tyres.

Mr. Brooks said Bridgestone hopes to be able to start recalling some workers in the truck and bus tyre area by the fourth quarter, provided the economy starts to recover.

“Our hope is that all truck and bus production teammates can return to work by the end of the first quarter of 2010. The truck tyre market is often seen as a leading indicator of how the economy is doing. As consumer confidence begins to improve and consumer spending increases, more trucks - and truck tyres - will be needed to address consumer demand,” he said.

Hourly workers who will be laid off beginning in mid-March will be eligible for pay from the company consistent with the collective bargaining agreement. Salaried employees will receive severance benefits in accordance with company policy as well as out-placement assistance. Affected teammates may also be eligible for unemployment compensation from the state.

Bridgestone has operated the 2.2 million-sq.-ft. LaVergne plant since 1983, when it bought it from Firestone Tire & Rubber Co. It has a listed capacity of 18 500 units a day.

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Press release from Bridgestone Americas Inc