BETHUNE, France — Bridgestone Corp. will cease production in 2021 at its 60-year-old passenger tire plant in Bethune "in response to the challenging long-term outlook for the European passenger tire market."
"Bridgestone has to consider structural measures to ensure the reduction of its production overcapacity and improve its cost efficiency," the company said.
The decision to close the plant was announced at an extraordinary works council meeting Sept. 16 as "the only viable path to safeguard the competitiveness of Bridgestone's operations in Europe."
The Bethune plant, opened in 1960 by Firestone Tire & Rubber Co., is rated at 19,200 car tires a day with 863 production-line workers. Bethune is a community of 25,000 in northern France close to Lille and the Belgian border.
The plant, one of five passenger tire factories Bridgestone operates in Europe, earned a General Motors Co. Supplier Quality Excellence Award as recently as 2016.
Bridgestone said it has been losing money on tires made at the plant despite initiatives made over the past few years to increase the plant's competitiveness.
"Closing the Bethune plant is not a project we are taking lightly, but there is no other solution to overcome the challenges that we are facing in Europe," Bridgestone EMIA CEO Laurent Dartoux said in a prepared statement.
"This is a necessary step to ensure that we preserve the sustainability of Bridgestone's business in Europe."
Europe represents 17.5% of Bridgestone's global sales revenue, or $4.75 billion in fiscal 2019.
"We are fully aware of the implications of the announcement made today and of the consequences that it could have for the employees and their families," Mr. Dartoux said.
The closing is not expected to take place before the second quarter of 2021, Bridgestone said.
"This project is no reflection on the engagement of the employees, nor on their many years of commitment to delivering high quality products for our customers. It is a direct result of a market situation that Bridgestone needs to address. The priority is clearly to find a fair and adapted solution for all the employees by offering each of them individual support, as well as solutions consistent with their personal and professional projects."
To mitigate the impact on the plant's employees, Bridgestone will offer pre-retirement measures, support for the reassignment of employees to other Bridgestone sites and initiatives to facilitate external redeployment.
Furthermore, Bridgestone said it intends to draw an employment-revitalization plan for the local area and to actively search for a buyer for the Bethune site.
Bridgestone said the "current industry context" for passenger tires — no to slow growth overall and increasing competition from "low-cost" Asian brands — is threatening its competitiveness in the European market. For the last several years, the market for passenger tires has been facing strong headwinds — even without taking into account the impact of the COVID-19 pandemic.
Bridgestone's other car tire plants in Europe are in Tatabanya, Hungary; Bari, Italy; Poznan, Poland; and Burgos, Spain.
The company had targeted the Bari plant for closing in 2013-14, but reversed that decision after receiving investment support from the Italian government.