(Editor's Note: This story is part of our #TireBiz30 in which we feature one archived story every day of September to celebrate Tire Business' 30th anniversary. Each story represents one of the most relevant news story published in our pages for that year.)
AKRON — Bridgestone/Firestone Inc. verified June 18 what had been whispered about in its corporate hallways for weeks: It will relocate its corporate headquarters staff from Akron to Nashville, Tenn.
The move will result in the loss of an undetermined number of jobs among the 1,350 currently employed at the firm's Akron operations.
The relocation, to be completed by year's end, will involve the transfer of Yoichiro Kaizaki, Bridgestone/Firestone chairman and CEO, and James P. McCann, president and chief operating officer, as well as an undetermined number of Bridgestone/Firestone executives. Other positions will be evaluated on a case-by-case basis.
The move marks the third time in the last four years that the tire maker's headquarters has been relocated.
Mr. McCann, who oversaw the establishment of Bridgestone's Nashville headquarters in the late 1980s, attributed the suddenness of the announcement, in part, to the need to quell the "many rumors" circulating within and outside the company.
"We are not yet ready to announce the number of positions involved in the move, but they will be identified as quickly as possible, and every employee whose job function is transferred to Nashville will be given the opportunity to relocate," he said.
Five operations are remaining in Akron, although a company spokesman said their future still is under evaluation. Those operations are: research and development, synthetic rubber, a computer center, race-car tire manufacturing and some miscellaneous corporate functions.
In weighing the relocation, the company reviewed various options for establishing new headquarters, including the Akron area, Mr. McCann said. "However, we believe Nashville makes the best sense for us," he said.
Moving south brings company executives closer to the 200 Bridgestone Tire sales and marketing personnel based in Nashville. The Tennessee site also is near two of the firm's tire plants-La Vergne and Warren County-which employ about 2,000.
"Nashville is centrally located to our plants, to other Bridgestone/Firestone operations and to our original equipment and replacement customers," Mr. McCann said. The city also is near a major international airport, which Akron doesn't have.
No external factors, such as tax breaks from Nashville or the lack of incentives from Akron, prompted the decision to move, a company spokesman said.
Job losses in Akron, according to industry sources, could range from fewer than 200 to a total closure of the headquarters. "More will stay than go," the Bridgestone/Firestone spokesman said.
Harry Millis of Fundamental Research Inc. said he leans toward a smaller number: 150 moving this year, with another 150 to 200 possibly moving later.
The 65,000-sq.-ft. Nashville headquarters has no room to accommodate the Akron personnel. Initially, the firm is likely to lease a facility in the Nashville area for the northern contingent.
Mr. Millis expects the Akron site to remain open for the foreseeable future, but virtually no decision-making will be done there. While the analyst was slightly surprised by the timing of the announcement, he said it's another indication of how the tire industry is changing.
"This is just a further sign of what was already obvious: Bridgestone is assuming firm control of Firestone," he said, adding that perhaps it is a move by the Japanese parent to remove the subsidiary from the "traditional North American tire culture" Akron represents.
Analyst Donald DeScenza of DeScenza Murphy & Co. agreed Akron holds only symbolic historic significance for Firestone. "What (the move ) means is that Firestone has been completely absorbed by Bridgestone," he said. "(Firestone) is not independent or autonomous anymore."
Analysts in Japan echoed the sentiments of their North American counterparts. "In terms of actual impact, 1 doubt there will be any," said Stephen Usher of Kleinwort, Benson International. "But in terms of what it signals, the message now is that Firestone clearly is a subsidiary of Bridgestone. It's an indication that the (Bridgestone/Firestone) operation finally will be integrated into Bridgestone and that Bridgestone is calling the shots."
Michael Remington of S .G. Warburg Securities (Japan) Inc. called the decision "only a big move in terms of distance. Frankly, we had hoped for something different early in Mr. Kaizaki's tenure something that would address the more painful decisions that will have to be made, like closing a plant or laying off workers."
Firestone isn't a stranger to moving. In 1987, John Nevin, then chairman of Firestone, relocated the corporate headquarters to Chicago, wanting the company to be in a major economic center.
Two years later, after Bridgestone had purchased Firestone, the firm announced it was consolidating operations in Chicago and Nashville back in Akron.
According to a Bridgestone spokesman, the return to Akron in 1989 was orchestrated by former Chairman George Aucott, who had taken over as chairman of Bridgestone/Firestone from Mr. Nevin.
The current Chairman, Mr. Kaizaki, now is correcting this with the Nashville move, he said.
What issue concerns you most heading into 2019?
|The threat of more tariffs.||
27% (27 votes)
|The new Congress in Washington.||
35% (35 votes)
|Price fluctuations for the products we sell.||
10% (10 votes)
|More disruptions across the industry.||
29% (29 votes)
|Total votes: 101|