Firestone Shuts Plants, Lays-Off Workers

NASHVILLE, Tenn.--Citing decreased demand and increased inventories for non-recalled Firestone tires, Bridgestone/Firestone Inc. is cutting tire production at its LaVergne, Tenn. and Oklahoma City, Okla. plants for 28 days between now and January. At the same time, the company will lay-off some 450 people at its troubled Decatur, Ill. facility for an indefinite period beginning Oct. 29. The plant will also curtail production for 14 days in December.

“Production of replacement tires related to our safety recall will continue uninterrupted,” said John T. Lampe, the company’s chairman, chief executive officer and president.

“Throughout this recall, we have continually increased the production of P235/75R15 replacement tires,” he said. “Our efforts to maximize production continue unabated,” Lampe noted.

“We now have replaced more than 4 million recalled tires, and are solidly on target to complete this effort by the end of November. Through our 13,000 authorized outlets, we are currently replacing about 80,000 tires a day. The completion of our recall remains our highest priority,” said Lampe.

The layoffs in Decatur, and the production downtime in Decatur, LaVergne and Oklahoma City, are being taken to reduce tire inventories, which are in oversupply for the following reasons:

• Increased inventories established earlier in the year in anticipation of a possible work stoppage, which was averted when the company successfully negotiated new contracts with the USWA, which were ratified on Sept. 21.

• A decrease in demand for Firestone tires.

• A shifting market trend to larger-sized tires.

While Oklahoma City will idle all production during this period, LaVergne will produce about 7,000 tires a day during the first two-week interval. Following the layoffs, it is expected the Decatur plant will produce 10,000 to15,000 tires a day. The three plants will be idled during the second curtailment period.

“Certainly, there is no good timing for this kind of an announcement, but I feel it is important that we inform our employees now so they can begin to plan for the impact this news will have on their lives,” said Lampe. “I have made a commitment to our employees and our customers to rebuild this organization and the Firestone brand,” added Lampe. “In order to keep that promise, this company must be financially strong and viable. These are the necessary, but painful, first steps to ensure that financial health and viability.”

For employees affected by the cutback in production schedules, “the company will provide benefits consistent with the company’s policies and collective bargaining agreements” with the United Steel Workers of America (USWA). Generally, this means that affected employees will receive up to 80 percent of their usual wages during the temporary downtime, when state unemployment benefits are included.

Those Decatur employees who are being laid off for an indefinite period “will receive payments consistent with the company’s policies and collective bargaining agreement with the USWA.”