MEXICO CITY (June 18, 2001)—Bridgestone/Firestone Inc.´s Mexican subsidiary could go in one of two entirely different directions: expansion of a manufacturing facility or closure of its two factories.
It all depends on the outcome of Bridgestone/Firestone de Mexico´s negotiations with unions representing its more than 1,000 workers at the subsidiary´s Cuernavaca and Mexico City tire plants. The firm wants wage and benefit concessions because it says it is paying workers 40 to 50 percent more than the average wages for the industry, a company spokeswoman said.
These actions in Mexico are occurring at the same time Bridgestone/Firestone is seeking concessions at its plant in Argentina under threat of plant closure.
The Mexican subsidiary employs about 750 in Cuernavaca and 365 in Mexico City. Two unions represent the workers: the Mexican Republic Rubber Industry Workers and Bridgestone/Firestone de Mexico National.
If the unions agree to the reductions, the spokeswoman said, it´s likely Bridgestone/Firestone will boost production capacity at the 22-year-old Cuernavaca site. The capacity expansion is needed to bolster the subsidiary´s share of the original equipment tire market in Mexico, she said.
The expansion—along with modernizing the Cuernavaca plant, which would include a technology upgrade and at least one new Banbury machine—would cost Bridgestone/Firestone between $10 million and $11 million, she said.
The tire maker´s initial goal is to increase capacity to about 15,000 tires per day at the factory from an estimated 13,000, she said. Between the two plants, it hopes to manufacture about 18,000 tires a day in Mexico by the end of the year.
The company does not plan to expand its 43-year-old facility in Mexico City, where it makes about 2,200 bias-ply light and medium truck tires daily, another company official said. Bridgestone/Firestone makes radial passenger and light truck tires in Cuernavaca.
The expansion plan, however, will not be activated until Bridgestone/Firestone de Mexico receives concessions from the unions, the spokeswoman said.
“A wage reduction measure is necessary to remain competitive in this market,” a Bridgestone/Firestone spokesman said. The company “wants to remain competitive, but closing the plant if concessions are not made may be the only option.”
The tire maker´s plan is to increase productivity at the plant if it can resolve its issues with the unions, the spokeswoman said, noting that “our goal is to make it one of the most modern in North America. But it depends on how negotiations go. We need to do what we have to do.”
The tire manufacturer also is looking for concessions at its plant in Argentina “which would put us more in line with the two other local tire manufacturers, Pirelli and Fate,” said Mark A. Emkes, president of International Tire Operations.
“While we were certainly proud to be able to pay the highest wages in the tire industry, current conditions will no longer allow us to do so,” he said. “In view of losses being incurred at our Argentina location, we need these concessions in order to survive. Otherwise, we will have no choice but to close our Argentina facility,” which employs about 800 and makes passenger, light and medium truck, farm and off-the-road tires.
Mr. McNulty writes for Rubber & Plastics News, a sister publication of Tire Business. Reporter Bruce Davis contributed to this report.