NASHVILLE, Tenn. (Aug. 3, 2006) — Bridgestone Firestone Chile S.A. will close its multipurpose tire plant in Coquimbo, Chile, by year-end, citing “intense competition” from low-cost producers and the plant's outdated product mix.
“We have a difficult challenge in Coquimbo,” said John Jenkins, president of Bridgestone Firestone Chile (BFCH). “The reality is that as market conditions erode for low-end or 'mass-market' tires, the plant, which for several years hasn't generated a reasonable return on assets, is now projected to begin losing a significant amount of money. New capital investment will not reverse the market forces that have created the competitive obstacles we are facing.”
BFCH, a subsidiary of Bridgestone Americas Holding Inc., will maintain a sales office in Santiago, Chile, in order to continue supporting its dealers in Chile, Bolivia and Peru. BFCH will source tires for the markets it services in the future from other BFS plants in Latin America.
The Coquimbo plant, which began operations in 1975, was purchased by BFCH in 1999 and produces radial and bias ply passenger and light truck tires, truck and bus, and off-the-road tires. More than 70 percent of the tires made at the plant are in the low-end, shrinking, “mass market” segment and include bias ply tires that are unique to this market. The facility employs more than 470.
Mr. Jenkins said BFCH will carry out the closing “in full accordance with Chilean labor law…. We have contacted local government leadership, the union and the community to explain our decision as well.”
The company did not disclosed the anticipated costs associated with the closing.