Dive Brief:
- Bridgestone Americas announced plans last month to close its truck and bus radial tire plant in LaVergne, Tennessee, effective July 31.
- The facility’s shuttering will impact approximately 700 employees, according to the release. The company is evaluating the last working day of each staff member, Emily Weaver, director of stakeholder and reputation management at Bridgestone Americas, said in an email.
- The LaVergne plant’s tire production will be moved to Bridgestone’s other Tennessee location in Morrison, Global CEO Shuichi Ishibashi said in a Feb. 22 earnings call.
Dive Insight:
The LaVergne factory began operations in 1972 and was formerly owned by another tire maker, Firestone, until Bridgestone acquired the facility in 1983 as its first U.S. facility.
Bridgestone opted to close the plant due to its age and high output costs, Ishibashi told analysts.
With the pending closure, the company has integrated manufacturing at its U.S. facilities, such as the Morrison plant. In August 2023, Bridgestone broke ground on a $550 million Morrison plant expansion, set to be complete by the end of 2026. The expansion is part of Bridgestone’s long-term strategy to invest in 16 plants worldwide to shore up production of premium tires, which included the Morrison site and its Trenton, South Carolina, factory.
The LaVergne plant closure and Morrison expansion are part of the tire manufacturer’s ongoing business plan to cost-effectively optimize its U.S. footprint. The strategy includes upgrading and expanding current facilities and reducing the workforce. Last year, Bridgestone cut over 100 jobs at its agricultural tire plant in Des Moines, Iowa. The company also offered employees buyouts at its Des Moines site in January.
Bridgestone released an update to its business plan for 2025 earlier this month, forecasting a price increase in raw rubber materials. The tire maker is also facing the uncertainty of tariffs on Canada and Mexico, which may have negative impacts on its supply chain and its car manufacturing customers, Ishibashi said. The tire maker is closely monitoring the levies on Canada and Mexico, as well as steel tariffs, since Bridgestone uses steel coil in the tires, Ishibashi added in the Feb. 22 earnings call.
In the event the tariffs take effect, the company’s assumption will be to further utilize its U.S. production plants, Ishibashi said. However, he added that the biggest risk will be on Bridgestone’s U.S. operations, which is 40% of the company’s revenue.
“The various plans are dissimilated and for each of the possibilities, we are trying to come up from the worst possible plans,” the CEO said. “And we do have to be mindful of end consumers. We do have to deal with the core assemblers. So, import tariffs in which companies, how the process are going to be the enforced, we do not know for sure.”
Bridgestone is not the only tire maker on the lookout for Trump’s Mexico and Canada tariffs impact, which are currently set to go into effect March 4. The Goodyear Tire & Rubber Co.’s Q4 and full-year 2024 earnings improved due to their own corporate savings plan. However, the looming tariffs on the two countries could reduce the Goodyear’s flexibility to use its global manufacturing facilities to meet tire demand, according to a recent securities filing.
