PCR & LTR Production to End at Bridgestone LaVergne Plant

Bridgestone Americas Tire Operations (BATO) has made was it calls “a difficult decision”. On January 22 the Bridgestone Americas unit announced that, in light of negative economic conditions, it will cease the manufacture of passenger car and light truck tyres at its factory in LaVergne, Tennessee. This sombre news follows a December 1, 2008 notification that 148 hourly and 10 salaried positions were being eliminated at the facility.

“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, US, Canada and Monterrey Manufacturing Group, BATO.

Following the December announcement, and prior to making any final decision, the company reports it participated in ongoing discussions with the leadership of the United Steelworkers on what, if any, actions could be taken to continue consumer tyre production at that facility. Following those meetings, says Bridgestone, 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.

As BATO phases out consumer tyre production at the LaVergne plant, an additional 294 hourly, 31 maintenance and 60 salaried workers will be made redundant, beginning in mid-March. The cessation of consumer tyre manufacturing at the plant will result in a permanent reduction of 543 jobs, a number which includes the 148 hourly and 10 salaried workers announced in December.

Bridgestone reports that the next step in the process is to negotiate with the USW the terms under which passenger car tyre production at LaVergne will be phased out, specifically including benefits to which hourly workers will be entitled. BATO says it will work with the union as well as local and state officials to help address the impact on workers at the LaVergne plant, their families and the community. Salaried employees 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.

Additionally, due to continuing global slow-down in truck tyre demand, BATO has announced that it will reduce production in order to better align truck tyre inventory with current 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 workers 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 tyre 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 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.”

The hourly workers to be laid off beginning in mid-March will be eligible for pay from the company consistent with their collective bargaining agreement. Salaried employees will receive severance benefits in accordance with company policy as well as out-placement assistance. Affected employees may also be eligible for unemployment compensation from the state, adds Bridgestone. Truck tyre manufacturing will continue at LaVergne, the factory employing more than 700 workers – hourly, maintenance and salaried – in this capacity.

“While these decisions were difficult, the actions are necessary in order to ensure the health of our entire Americas tyre business,” Brooks concluded.