Bridgestone/Firestone Plan Layoffs
Nov. 17, 2000
NASHVILLE, Tenn. (AP) _ Bridgestone/Firestone Inc. announced Friday it will lay off 1,100 workers at two plants and curtail production at a third because of sluggish tire sales.
Workers at plants in Oklahoma City and LaVergne, Tenn., will be notified in the next couple of weeks of layoffs that will take effect Jan. 21, the company said in a statement.
Meanwhile, the embattled tiremaker's chief financial officer announced his retirement, and the company said it will replace him with the treasurer of its Tokyo-based parent company, Bridgestone Corp.
The 700 workers being laid off in Oklahoma City represent 37 percent of the plant's work force. Another 400 workers are being laid off in LaVergne, or 27 percent of that plant's work force.
Also, a plant in Warren County, Tenn., will shut down for two weeks beginning Jan. 14, but no one will be laid off there, the company said.
Bridgestone/Firestone president and chief executive officer John T. Lampe said he is optimistic sales will pick up next year, enabling the company to bring back laid off employees.
``We are in a situation where sales of replacement tires have declined for several reasons,'' he said. ``Obviously concerns surrounding the recall of certain Firestone tires is a contributor to this decline. ... However, the entire industry is experiencing a slowdown in sales.''
The company said it had already bolstered its inventory of tires in anticipation of a strike earlier this year when it began experiencing decreases in sales. The strike was averted when union workers accepted a three-year contract Sept. 16 after difficult negotiations.
It is the second round of layoffs since Nashville-based Bridgestone/Firestone announced in August a recall of 6.5 million tires. The ATX, ATX II and Wilderness AT tires, most of them on Ford Explorers, have been linked to 119 deaths and 500 injuries in the United States.
The company announced Oct. 17 plans to lay off 450, or 25 percent, of its 1,950 workers in Decatur, Ill. In addition, it slowed production at its LaVergne plant, with a full shutdown scheduled for Dec. 14 to Jan. 1. The Oklahoma City plant follow a similar slowdown.
``Some people may ask why we did not take more drastic steps last month,'' Lampe said. ``As we recently began our budget development and sales forecast processes for 2001, it became apparent our earlier production adjustments were not adequate and a more aggressive plan was needed.''
The retirement announcement by Tetsuo Ando, 59, comes after 40 years with the company and seven years as CFO. He will be replaced by Akira Nozawa, 51, treasurer of Bridgestone Corp.
Bridgestone/Firestone spokeswoman Christine Karbowiak said Ando's retirement is not linked to the tire recall. ``Ando had been talking about retiring for some time prior,'' she said.
Barry Green, executive vice president of Lippincott & Margulies, a corporate and brand consultant based in New York, said Friday's developments do not reflect well on the company.
``I think the timing of both stories certainly is not a positive thing going forward,'' he said. ``Always the chief financial officer leaving raises big question marks. Why would the chief financial officer leave in the middle of a crisis?''
The company said Friday's developments will not affect its ability to replace recalled tires. Lampe said about 80 percent, or 5 million, recalled tires have been replaced, and he expects all waiting lists to be eliminated by the end of November.
The company has appointed an investigation team to determine what caused the tires to fail.
Meanwhile, a federal judge in Indianapolis on Friday ordered Bridgestone/Firestone to stop destroying its recalled tires until some can be preserved for use as evidence in lawsuits against the company.
On the Net:
National Highway Traffic Safety Administration: http://www.nhtsa.gov