Bridgestone Firestone Addresses Decrease In Demand For Passenger And Light Truck Tires

NASHVILLE, Tenn. (Dec. 1, 2008) — Bridgestone Firestone North American Tire, LLC (BFNT) today announced that beginning Dec. 21, 2008, it will lay off 148 hourly and at least 10 salaried team members at its LaVergne, Tenn., facility due to a decrease in demand for passenger and light truck tires. The LaVergne plant, which employs approximately 1,700 active teammates, manufactures truck and bus tires in addition to passenger and light truck tires.

Although the company has previously adjusted production levels to address slowing demand, due to the increasing impact of the global economic crisis that has resulted in a further weakening and decrease in demand in the North American tire market, the company will take this additional step to reduce manufacturing capacity in North America. This drop in demand for consumer tires has resulted in a growth in inventory, and continuing consumer tire production, even at the current adjusted levels, will only exacerbate the situation and add to that inventory.

“In general, the tire industry in the United States — like many other industries — is facing significant challenges in the face of the global economic slowdown,” said Steve Brooks, President of Manufacturing Operations for BFNT. “Even though we have taken a number of steps intended to align our consumer tire production levels with industry demand, including reducing daily unit production, curbing or eliminating overtime and extending shutdown dates, unfortunately we find it necessary to take this additional step,” Brooks continued.

In addition, while no final decision has been made, because of the weak and decreasing demand in the North American passenger and light truck tire markets, the company advised representatives of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) that it may be necessary to cease most or all passenger and light truck tire production at the LaVergne facility. Although it is not clear that this action, should it occur, rises to the level of a “partial plant closure” within the context of the company’s collective bargaining agreement with the USW, the company provided union leadership a letter that can serve as a six-months notice of the potential cessation of passenger and light truck manufacturing at the plant. The announcement of the company’s intention to seriously consider elimination of consumer tire production at the LaVergne facility will have no impact on the plant’s production of truck and bus tires.

Prior to making any final decisions and in the spirit of cooperation during these challenging economic times, the company stands ready to immediately begin discussions with the USW on what, if any, actions could be taken to continue consumer tire production at that facility. If, after these good faith discussions, the decision is made to cease most or all passenger and light truck tire production at the plant, the elimination of consumer tire manufacturing could occur on or before June 30, 2009. This action could result in the elimination of approximately 500 hourly and salaried jobs.

While no final decision has been made regarding the elimination of consumer tire manufacturing at the LaVergne plant, the decision to put this idea “on the table” for serious consideration was an extremely difficult one, as was the announcement of the layoff beginning Dec. 21.

“The steps we announced today were taken only after serious consideration of our alternatives; however, these actions are necessary in order to ensure the health of our entire North American tire business,” said Brooks. “The appropriate union officials, as well as government and community leaders, have been contacted to explain the situation at the plant. We have held and are continuing to hold meetings with our plant teammates as well,” Brooks concluded.

The LaVergne plant began operations in 1972. It was the first tire-producing facility in North America for Bridgestone Corporation, which purchased it from The Firestone Tire & Rubber Company in 1983.