Bridgestone/Firestone says Oklahoma tire plant may be closed

OKLAHOMA CITY (AP) -- Bridgestone/Firestone's Dayton Tire plant, hit hard by overseas competition and shrinking demand, has been racking up millions of dollars in losses and may have to be closed,

Friday, April 28th 2006, 11:53 am

By: News On 6

OKLAHOMA CITY (AP) -- Bridgestone/Firestone's Dayton Tire plant, hit hard by overseas competition and shrinking demand, has been racking up millions of dollars in losses and may have to be closed, company officials said Friday.

Steve Brooks, vice president of manufacturing operations for the tire company, said no final decision has been made, but union officials have been notified there is a potential for closure of the 2.6 million square-foot plant in southwest Oklahoma City, which employs 1,423 people and 158 contract employees and makes about 26,200 tires per day.

He said the factory lost $40 million last year and $17 million in the first quarter of this year alone. Projections indicate the losses for this year could be as high as $60 million. The plant has an annual payroll of about $128 million. The average worker makes $900 per week, plus $800 in weekly benefits.

"The bottom line is this plant is losing enormous amounts of money and for the overall good of our business we had to make a decision to move forward," Brooks said. "The market that this facility operates in has been shrinking.

"In addition, we've got fierce competition in that marketplace. ... Even considering substantial capital investment, we didn't feel we had a good business case to make this plant globally competitive."

He said the plant has been buffeted by rising production costs and strong competition from low-end imported tires.

Brooks said the company is talking to union representatives, but isn't looking for any particular concessions. No plant closure is expected before Dec. 31. The company is required under union agreement to negotiate with workers for a six-month period before closing the facility.

The company's contract with the United Steel Workers union expires in July, but Brooks said the announcement wasn't a negotiating tactic.

David Nichols, a divisional steward for the United Steel Workers union local in Oklahoma City, declined comment.

"It just happened this morning," Nichols said. "It's new to everyone. That's pretty much where we're at right now. We haven't thought that far ahead yet."

Nichols said the local has about 1,000 members, all employed at the Dayton Tire plant.

It's at least the second time the plant has been threatened with a shutdown. In 1987 the plant was saved after union members accepted wage and benefit cutbacks.

Gov. Brad Henry said Friday that his understanding in talking to company officials was that there was a high likelihood of the plant's closure.

"We pretty much gave them an open-ended offer," Henry said. "You tell us what you need to keep that plant open ... and we'll do what we can to meet that need.

"They just didn't see how they could keep the plant open because of market conditions. There are just certain market conditions that are beyond our control."

The plant has operated since 1969. Brooks said despite $40 million in renovations and updates during the past three years, the plant continued losing money.

The state Department of Commerce has estimated that the plant's closure would have a ripple effect of between $800 million and $1 billion in lost wages and economic activity, said state Rep. Jon Nance, R-Bethany, in whose district the plant is located.

Nance said there have been long-standing concerns about the economic viability of the plant.

"Ever since I've been elected they've been on the bubble," said Nance, who is completing his fourth two-year term. "They can't maintain their position in the market globally."

The plant makes 13-, 14- and 15-inch tires for cars and light trucks at a time when 16-inch tires have become a more popular size.

In February, General Motors Corp. closed its automobile manufacturing plant in Oklahoma City, idling about 2,000 workers.

Henry said the state's economy is growing, has added 50,000 new jobs in the past two years and is in a good position to absorb the potential closure of the tire plant.

Oklahoma City Mayor Mick Cornett noted that manufacturing jobs are leaving other communities as well but said Oklahoma City is in a good position to absorb the hit, as other areas of the local economy, particularly in the medical, construction and energy fields, continue to grow.

"We have a number of job retraining programs in place," Cornett said. "We have wonderful infrastructure for people who are looking to retrain or to improve the job that they may already have. We will be looking long-term as this plant closes to try to help those employees find a good job. In the meantime we're going to try to create jobs for them."