Given the challenging long-term evolution of the industry in the European passenger tyre market, Bridgestone has to consider structural measures to ensure the reduction of its production overcapacity and improve its cost efficiency.
After carefully studying all the potential options, the company announced during an Extraordinary Works Council today it intends to stop all activity at the Bethune plant, as it is the only viable path to safeguard the competitiveness of Bridgestone’s operations in Europe.
The proposal could impact 863 employees. Bridgestone is fully aware of the social consequences of this project and is committed to using all means at its disposal to define support plans for each employee.
This would be done in close consultation and through sustained dialogue with employee representatives. Preretirement measures, support for the reassignment of employees to other Bridgestone activities in France and initiatives to facilitate external redeployment, will be proposed by the company and discussed in detail with employee representatives in the coming months.
Furthermore, Bridgestone intends to minimize the impact on the region as much as possible by deploying a solid employment revitalization plan for the area. The company has committed to establishing a dedicated outplacement program and to actively search for a buyer for the site.
Bridgestone has to consider structural measures to preserve the sustainability of its operations in Europe
The current industry context for passenger tyres is threatening Bridgestone’s competitiveness in the European market. For the last several years, the market for passenger tyres has been facing strong headwinds – even without taking into account the impact of the COVID-19 pandemic. The passenger tyre market has seen its volumes stabilize over the last few years (average annual growth < 1%) while competition from low-cost Asian brands continues to increase (market share of 6% in 2000 increased to 25% in 2018) 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. And within Bridgestone’s overall European footprint, the Bethune plant is the least well positioned and least competitive.
Over the last years, Bridgestone has taken several measures, including attempts to increase the competitiveness of the Bethune plant. These have proven to be insufficient and Bridgestone has been losing money on tyres produced in Bethune for several years. Considering the current market dynamics, 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 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.”
This project would not take place before the second quarter of 2021. Bridgestone will continue to keep a high presence in France, notably through sales and retail operations with about 3 500 employees.