Bridgestone/Firestone Announces Production Adjustment Plan
17 October 2000
Bridgestone/Firestone Announces Production Adjustment Plan
* Production Of P235/75R15 Replacement Tires for Safety Recall
Will Continue Unabated
* Temporary Production Cutback Will Occur in Three U.S. Plants
* Decatur Facility Will Remain Open but Operate With About 75
Percent of Current Hourly Workforce
NASHVILLE, Tenn., Oct. 17 In a planned effort to adjust
for an oversupply of certain non-recall replacement tires,
Bridgestone/Firestone, Inc. will curtail tire production at its LaVergne,
Tenn. and Oklahoma City, Okla. plants for 28 days between now and year-end,
the company announced today. At the same time, the company will layoff
approximately 450 people at its Decatur, Ill. facility for an indefinite
period, effective Oct. 29th. The plant will also curtail production for 14
days in December.
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.
"Production of replacement tires related to our safety recall will
continue uninterrupted," said John T. Lampe, chairman, chief executive officer
and president of Bridgestone/Firestone.
"Throughout this recall, we have continually increased the production of
P235/75R15 replacement tires," added Lampe. "Our efforts to maximize
production continue unabated.
"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, 2000.
* A decrease in demand for Firestone brand 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 -
15,000 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."
About Bridgestone/Firestone, Inc.
Nashville-based Bridgestone/Firestone, Inc., is a subsidiary of
Bridgestone Corporation, the world's largest tire and rubber company.
Bridgestone/Firestone manufactures and markets Bridgestone, Firestone, Dayton
and house and private brand tires. The company also produces Firestone air
springs, roofing materials, synthetic rubber and industrial products. The
company employs approximately 35,000 employees in North America. For further
information, please visit the website at http://www.bridgestone-firestone.com.