Bridgestone’s Bethune Plant in Northern France
Close on the heels of the news that Continental AG intends to cease operations at its plant in Aachen, Germany, comes notification of another potential tire plant closure in Europe: Bridgestone Corporation has announced it intends to stop all activity at its tire manufacturing facility in Bethune, northern France.
The Japanese tire giant explained that in light of the “challenging long-term evolution of the industry in the European passenger tire market”, structural measures have to be considered to reduce production overcapacity and improve cost efficiency.
During its Extraordinary Works Council on September 16, the company announced that having carefully considered all the potential options, it intends to stop all activity at the Bethune plant, explaining that this is “the only viable path to safeguard the competitiveness of Bridgestone’s operations in Europe.”
863 employees could potentially be impacted by the closure. The tire maker claims it is completely aware of the social impact of the closure and will do everything it can to define support plans for each employee. Bridgestone explained that this support can be drawn up “in close consultation and through sustained dialogue with employee representatives.”
Pre-retirement measures, support for the reassignment of employees to other Bridgestone locations in France, as well as initiatives to bring about external redeployment, will be proposed by the company and discussed in detail with employee representatives in the coming months.
In order to minimize the impact on the region as much as possible, Bridgestone plans to make use of a “solid” employment revitalization plan for the area. The company has committed to establishing a dedicated outplacement program, as well as actively searching for a buyer for the site.
In a detailed rationale for its decision to close the Bethune plant, Bridgestone conceded that the current industry context for passenger tires has threatened its competitiveness in the European market. Even without the devastating impact of the coronavirus pandemic, the passenger car tire market has been facing strong headwinds, with average annual growth at less than 1%. Meanwhile, competition from low-cost Asian brands is greater than ever and market share has increased from 6% in 2000 increased to 25% in 2018, according to Bridgestone, leading to general production overcapacity. This has resulted in pressure on pricing and margins, as well as overcapacity in the Low Rim Diameter segment, given a declining demand in LRD. Finally, the tire maker noted that of all its European facilities, the Bethune plant is the least well positioned and least competitive. The measures the company has taken over the past few years to increase the competitiveness of the plant have proven to be insufficient, and Bridgestone admitted that it has been losing money on tires produced in Bethune for several years. Considering the current market dynamics, the company stated, no improvement in the situation is foreseeable.
“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. This is a necessary step to ensure that we preserve the sustainability of Bridgestone’s business in Europe,” said Mr. Laurent Dartoux, CEO of Bridgestone EMIA. “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. 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.”
According to Bridgestone, operations at the Bethune plant will not stop before the second quarter of 2021. The company intends to continue to keep a significant presence in France, through sales and retail operations with about 3,500 employees.