Bridgestone Firestone Mexico to Close Mexico City Plant

Bridgestone Americas Holding subsidiary Bridgestone Firestone de Mexico, S.A. de C.V. (BFMX), announced on December 3 that it will close its tyre factory in Mexico City during the second half of 2008. This is a decision the company has described as “difficult”, but one believed to be necessary as “essential expansion of the plant is not feasible.”

In a statement Bridgestone Americas reported: “Due to its location in a metropolitan area, the complexities surrounding the ownership of the underlying land, the plant’s age (the building was constructed in 1937), intense competition from low-cost producers and a shrinking overall market for the products it builds, the company stated that it has no choice but to close the Mexico City Plant.”

Of critical importance to the future profitability of the plant, Bridgestone believes, would have been the option for expansion, as this would have enabled the manufacture of more technologically sophisticated and market-demand driven products; at present the facility is equipped to primarily build bias-play tyres in the light truck and truck/bus lines, a diminishing segment of the overall market which is dominated by low-cost producers. Furthermore, part of the land upon which the factory is located is leased from three different owners, and one of those owners has advised that BFMX’s lease will not be renewed and that the property is up for sale.

“We are grateful to the BFMX team mates and the union leadership in Mexico City for their support and efforts at the plant over the years,” said BFMX president Ariel DePascuali. “While we found it necessary to make a tough decision to close the Mexico City plant, the recently completed expansion of our Cuernavaca facility and the opening of the state-of-the-art manufacturing plant in Monterrey underscore our respect for the workforce in Mexico and our commitment to investment in this country.”

The decision to issue a notification of the closure of the Mexico City plant was made only after serious consideration of all alternatives, the company added. A total of 145 full-time hourly and 30 salaried employees are currently on the factory’s payroll, and Bridgestone Americas says is likely that many of the plant’s workers will be eligible to retire, based on their length of service.

The closing of the Mexico City plant will leave BFMX with two facilities, and the company states that its commitment to the Mexican market will not be affected by the end of production at this site. “The Cuernavaca and Monterrey plants will produce the high quality tyres that our customers want and deserve in efficient plants that can effectively compete in the global marketplace,” DePascuali said. “Although closing our plant in Mexico is a painful decision, we are committed to moving our business forward in Mexico. We will continue to work very hard to serve the needs of our team mates, our customers and our communities.”