Bridgestone Americas Tire Operations (BATO) on January 22 announced the decision to cease passenger and light truck manufacturing at its LaVergne, Tenn., tire plant due to negative economic conditions, which continue to create a difficult business environment. As previously communicated on December 1, 2008, the dour economic situation prompted BATO to evaluate this potential action.
“Based on current economic forecasts, it appears that the global economic crisis is going to get worse before it gets better. We are not immune from these challenging times,” said Steve Brooks, president, U.S., Canada and Monterrey Manufacturing Group, BATO.
Following the December announcement, and prior to making any final decisions, the company had ongoing discussions with the leadership of the United Steelworkers (USW) on what, if any, actions could be taken to continue consumer tire 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 tire production at that facility to a financial break-even point.
As BATO phases out consumer tire production at the LaVergne plant, an additional 294 hourly, 31 maintenance and 60 salaried workers will be released beginning in mid-March. The cessation of consumer tire manufacturing at the plant will result in a permanent reduction of 543 jobs, a number which includes the 148 hourly and 10 salaried teammates who were part of a December 2008 layoff and who were primarily involved in consumer tire manufacturing.
The next step in the process is to negotiate with the USW the terms under which passenger tire production at LaVergne will be phased out, specifically including benefits to which hourly teammates will be entitled. BATO 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 teammates may also be eligible for unemployment compensation from the state.
Further, due to the continuing global slow-down in truck tire demand, BATO has announced that it will reduce production in order to better align truck tire inventory with that demand; these production reductions will result in additional layoffs at the plant. The company will implement a layoff of approximately 191 hourly, 34 maintenance and 34 salaried teammates beginning in mid-March.
“We hope that the economy will begin to recover later this year; as a result we also hope that we will be in a position to begin calling teammates back to work in the truck and bus tire production area, perhaps as early as the fourth quarter of 2009,” Brooks said. “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 tire 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 tires – will be needed to address consumer demand.”
Hourly teammates who will be laid off beginning in mid-March will be eligible for pay from the company consistent with the collective bargaining agreement. Salaried teammates 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.
Truck tire manufacturing will continue at LaVergne with an enrollment of more than 700 teammates (hourly, maintenance and salaried).
“While these decisions were difficult, the actions are necessary in order to ensure the health of our entire Americas tire business,” Brooks said.
Nashville, Tenn.-based Bridgestone Americas Tire Operations (BATO) is a business unit of Bridgestone Americas, Inc., whose parent company, Bridgestone Corporation, is the world's largest tire and rubber company. Reporting into the BATO business unit are the company's Latin American tire operations, the U.S. and Canadian consumer tire businesses and the U.S. and Canadian commercial tire businesses. BATO develops, manufactures and markets Bridgestone, Firestone and associate brand tires. The business unit is focused on retail, wholesale and original equipment markets, supplying passenger, light truck, commercial vehicle, off road, motorcycle, agricultural and other tires to its customers in the Americas. In addition, through its Bridgestone Bandag Tire Solutions unit, retreading customers have access to industry-leading research and development, manufacturing, marketing and sales expertise, providing them with a total tire solution.