Firestone Closing Decatur Plant

A Smokey the Bear sign is seen as firefighters battle the Angora fire as it approached more homes Tuesday, June 26, 2007, in South Lake Tahoe, Calif. Firefighters continue to battle the 3,000 acre Angora wildfire near Lake Tahoe that has consumed over 200 structures.
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Bridgestone/Firestone Inc. announced Wednesday it will close the Decatur, Ill., plant that produced most of the 6.5 million tires the company was forced to recall last summer.

Bridgestone/Firestone said 1,380 employees and 100 contractors work at the plant. Another 440 Decatur workers have been laid off since the recall.

The tire maker sent a six-month notice of its plan to representatives of the United Steelworkers of America. It plans to close the plant by Dec. 31.

Plant officials would not discuss specifics about what will happen to workers until negotiations with the union are completed. Union officials did not immediately return calls for comment.

Bridgestone/Firestone chief executive John Lampe said he feels "rotten, terrible" about the closing, but promised the company would live up to its contractual agreements with the workers.

"I guess when I took this job I knew it wasn't going to be easy and there would be decisions I wouldn't like to make," he said in a telephone interview from Tokyo. "The first was layoffs, which I hated, and the next was the difficult decision to end our relationship with Ford Motor Co. And I don't think either one of those were as tough as this one."

Last August, Bridgestone/Firestone recalled all 15-inch ATX and ATX tires, and the 15-inch Wilderness AT tires built just in Decatur, after discovering those lines had high failure rates. After a four-month internal investigation, Bridgestone/Firestone said a faulty design and a unique manufacturing process at the Decatur plant caused some tires to suddenly lose their tread or suffer other failures.

The Decatur plant uses a process known as pelletizing, in which rubber pellets are blended with a lubricant to create the rubber that coats the steel belts of tires. Other plants use rubber slabs, which require less lubricant. The company found the lubricant apparently can cause a tire breakdown.

At least 203 deaths and more than 700 injuries have been linked to Firestone tire failures in the United States. Many involved rollovers of the Ford Explorer, the world's best-selling sport utility vehicle, which had Firestone tires as standard equipment.

Bridgestone/Firestone has insisted all Wilderness AT tires made at other plants are safe, but last month Ford announced it would replace all 13 million Wilderness AT tires on its vehicles because of safety concerns.

That came a day after Bridgestone/Firestone announced it was ending a nearly century-long relationship with Ford because of what it said was Ford's refusal to acknowledge design flaws with the Explorer that were partly responsible for the rollovers. Ford says the Explorer is safe and the tires were the sole reason for the accidents.

Lampe said the company plans to close the Decatur plant because of reduced consumer demand for Firestone tires, not because of the manufacturing problems.

"I know it's going to appear that way to people, but I promise you that the fact that Decatur is te candidate we are looking at is that it's our oldest facility," he said. "It is very costly to maintain. It has nothing to do with the recall, other than that the recall hurt our demand."

The Decatur plant is designed to produce about 30,000 tires per day — about 10 percent of the company's total tire production — but has only been producing half that since the recall, said John McQuade, the company's vice president of manufacturing operations.

The Decatur plant was built in 1942 to make tanks for the Army during World War II. Firestone bought the plant in 1963 and modified it to build tires. It has been in continuous production since and is the oldest of Bridgestone/Firestone's facilities that make tires for cars and light trucks.

"Our entire company is committed to rebuilding this organization and the Firestone brand," said Mike Gorey, Bridgestone/Firestone's corporate controller. "In order to keep that promise, this company must be financially strong and viable. This is a necessary, but painful step to ensure our continued financial health and viability."

The company has spent more than $900 million on the recall and will take a $10 million charge this quarter to close the plant. The company expects the closure will save $100 million a year.

The National Highway Traffic Safety Administration has been investigating whether more Firestone tires should be recalled. It plans to wrap up its probe within a month.

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