News from Notch Consulting, Inc.

September 18, 2020

Bridgestone closing French tire plant in 2021

Filed under: Carbon Black, General, Rubber Chemicals, Tires — Notch @ 1:44 pm

On September 16, Bridgestone Corporation announced plans to cease production at its 60-year-old passenger tire plant in Bethune, France in 2021. The company said the decision came in response to the challenging long-term outlook for the European passenger tire market, and that the closure represents the only viable path to safeguard the competitiveness of Bridgestone’s operations in Europe. All manufacturing operations at the site would cease, affecting 863 workers.

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.

The decision drew immediate protest from the union and workers, who protested outside the plant the day following the announcement.

Powered by WordPress.com.