Bridgestone Australia Announces Temporary Plant Shutdown

Bridgestone Australia Ltd has announced a temporary pause in production at its Salisbury manufacturing facility in South Australia. Shawn Hara, group chairman and managing director of the Australian Bridgestone operation, said the plant, which employs around 600 people, would be taken offline from April 14 to 27 2009 inclusive to reduce inventory holdings in line with consumer demand. No jobs will be affected by the closedown, notes the manufacturer, and employees will have access to leave entitlements. Hara also stated that no further shutdowns were planned for 2009.

“The economic slowdown is having an impact on consumer demand around the world and Australia is no different,” Hara said. “This step is a reflection of Bridgestone Australia’s ability to react quickly and prudently to the current situation to ensure we protect the long-term viability of our manufacturing business and the jobs of our valued employees.”

According to Hara, the company remains positive about the outlook for 2009. “We are committed to local tyre manufacturing and we are proud of providing quality Australian-made tyres to our customers,” he said. “We are not reliant on the vehicle manufacturers, as the majority of output from our Salisbury facility is distributed to the consumer replacement market through our strong Australia-wide retail network.

“Therefore, we believe this presents tyre retailers with a significant opportunity, as consumers will need to maintain these vehicles for longer – including fitting new replacement tyres,” Hara added. “From purely a Bridgestone point of view, we also see an opportunity to reinforce the quality of our product with our consumer market. When times are tough, consumers will revert to brands they trust. And there are few more trusted than Bridgestone.”

The Australian Manufacturing Workers Union wants to ensure workers are paid during the fortnight’s closure period. Union assistant secretary Colin Fenney says it is unclear whether all employees have enough leave to cover the time off. “We’re hoping that they do have sufficient leave to cover this – that’s the process we’re going through at the moment to find out who’s got leave who hasn’t and where the money’s coming from for them,” he said. “We’re really hopeful there’s sufficient leave for the people.”

According to Fenney, Bridgestone has also reduced production by about 2,000 units to 7,000 per day. He believes effects from the shutdown could be amplified by others planned at Australian General Motors subsidiary Holden. “A couple of years ago Bridgestone made the decision that the only original replacement market is Holdens and the rest is about customer demand,” he commented. “But with the financial crisis, people sort of the last thing they look at is putting new tyres on the car and when they do I think they look for the cheapest and not the quality.”