Bridgestone/Firestone (BFS) plans to expand capacity over the coming five years at its off-the-road (OTR) tire plant in Bloomington, a project made possible by the company's recent contract with union workers at the facility.
The firm will invest at least $12 million through 2012 at the factory to add capacity for new sizes and double curing capacity for giant loader tires. The expansion, which follows the completion of a five-year labor agreement a few weeks earlier, will result in additional jobs, including up to 50 this year, the company said.
``The agreement was really a critical cornerstone of this strategy,'' said Shawn Rasey, vice president of Bridgestone Firestone Off Road Tire Co. ``We needed to secure an agreement that was good for the union and for the company so that we would have stability during this investment phase.''
In December, the 300 members of United Steelworkers (USW) Local 787 approved a five-year contract that runs through 2012 and includes a no-strike clause for the entire term of the deal. Local 787 members will receive the same wage and benefit provisions as do BFS plants covered under the master contract, but the master pact runs only through July 18, 2009.
Mr. Rasey said the Bloomington factory wouldn't have gotten the investment if there were a possibility of a strike in the near future. By having the labor agreement in place, it allows the tire maker to assure customers that supply will be uninterrupted.
``This (contract) should give us the time to get this investment completed, and we're also hoping to attract more new investment at the plant,'' he said.
Mr. Rasey said BFS already has started hiring workers and ordering some of the equipment and molds to build the giant loader tires.
The initial investment to make the giant loader tires-which he said are used in ``some of the harshest and most severe conditions in the world''-will total $4.8 million. The equipment is scheduled to be installed by November so production of the tires can begin. No physical expansion will be needed at the 430,000-sq.-ft. factory.
``The capital investment is new machinery that will fit within the existing footprint of the plant,'' Mr. Rasey said. ``With additional equipment and people, it gives us the ability to build more tires without increasing the size of the plant.''
Additional projects that will allow the plant to produce new sizes and types of off-road tires are under review, with details expected to be concluded soon, BFS said.
BFS said the expansion is necessary because demand for OTR tires remains strong globally, driven by continued growth in emerging markets such as China, India, Brazil and Russia, along with increasing production of mineral resources.
``We are expanding our capacity to meet our customers' requirements now and in the future,'' Mr. Rasey said. ``With the strong global demand for off-road tires, it's clear that our customers can rely on our proven technology and products for all of their needs.''
The plant, one of two Bridgestone Corp. plants globally dedicated to OTR tires, produces about 300 tires a day, according to company data.
The former Firestone Tire & Rubber Co. opened the Bloomington facility in 1965. It later sold the facility, and BFS re-acquired the plant in 1994, six years after its Tokyo-based parent company, Bridgestone Corp., purchased Firestone.
Bridgestone also is expanding OTR tire capacity in Japan. It recently increased capacity at its dedicated OTR plant in Kitakyushu and is in the midst of a $287 million greenfield project to build another OTR tire plant adjacent to that facility.
Production at the new factory is expected to begin in the second half of 2009, with an expansion of the project already in the works that will increase capacity to about 50 metric tons of rubber a day. The project includes a related capacity increase for steel cord at Bridgestone's Saga, Japan, plant.
Mexico truck tire plant closing
In an unrelated move, BFS said its Bridgestone Firestone de Mexico S.A. de C.V. unit will close its 49-year-old Mexico City truck tire plant in the second half of 2008 because ``essential'' expansion of the facility is not feasible.
The Bridgestone Americas Holding Inc. subsidiary said the plant, situated in a metropolitan location, is surrounded by commercial and residential development. Additionally, much of the plant's land is leased from three owners, and one has decided not to renew the lease and instead is selling the property.
``Expansion of the plant is critical to the facility's future profitability through the production of more technologically sophisticated and market-demand driven products,'' the company said in a statement.
The plant builds primarily bias-ply light truck and truck/bus tires. Capacity is listed as 2,200 units a day with 145 full-time hourly and 30 salaried employees.
``While we found it necessary to make a tough decision to close the Mexico City plant, the recently completed expansion of our Cuernavaca facility and the opening of the state-of-the-art manufacturing plant in Monterrey underscore our respect for the work force in Mexico and our commitment to investment in this country,'' said Ariel DePascuali, president of the Mexican subsidiary.