Bridgestone Lays off 67 as US Off Road Tyre Demand Drops

The ripple effect from the downturn in North America’s construction industry is being felt by Bridgestone Americas Tire Operations (BATO). In response to a decline in demand for construction equipment, BATO is decreasing production of its small and medium off road tyres, and as of March 1 will lay off 67 hourly workers at its Bloomington, Illinois facility.

According to Bridgestone, production must be reduced in order to better align this inventory with demand. “The dramatic downturn in the economy continues to plague every industry, including ours,” said Shawn Rasey, president, Off the Road Tire, U.S. & Canada, Commercial Tire Sales division, BATO. “Sales demand for off road tyres began dropping in September 2008, the same time we began seeing a significant increase in inventory levels. We’ve made production reductions to accommodate the drop in sales – which have included eliminating discretionary overtime, reassigning teammates from parts of the plant hit by the economic slowdown to other areas of the plant, implementing a hiring freeze and cutting production days over the winter holiday – but unfortunately it hasn’t been enough.”

The decision was reached, says BATO, only after every alternative was given serious consideration. The plant was able to avoid layoffs at the end of 2008 despite two major reductions in scheduled production, as staff numbers had decreased through retirements and other ‘natural attrition’ factors. The company adds that a recent investment in new curing equipment at the plant to accommodate increased production for the giant tyre market, and the 40 jobs created at the plant as a result, is allowing this layoff to affect fewer people than it would have without the investment. While still under tremendous pressure, the giant tyre market has not yet experienced the same level of reduced demand as the small and medium size markets.

“While conscious of the current market volatility, we continue to take the longer view and invest in key segments to meet the demands of our customers,” Rasey said. “As the economy recovers, we fully expect the giant tyre segment to become stronger and require the output from our capacity expansion.”

Workers affected by the layoff who meet state criteria are eligible for unemployment benefits from the state of Illinois. Those currently enrolled in the company’s medical plan will have three months of coverage at the active rate and the option of then further continuing with the health plan under the US ‘COBRA’ law.

The company reports it will fill openings occurring at the plant due to attrition with workers affected by the March 1 layoff. If the economy shows signs of recovery later this year, BATO hopes to be in a position to begin calling these workers back to work, perhaps as early as the 4th quarter, 2009, and hopes all employees can return to work by the end of the 1st quarter, 2010.