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September 19, 2006 02:00 AM

BFS plant in Chile loses out to global competition

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    NASHVILLE, Tenn.-Bridgestone Fire- stone Chile S.A. will close its multipurpose tire plant in Coquimbo, Chile, by year-end, citing intense competition from low-cost producers and the plant´s outdated product mix.

    "We have a difficult challenge in Coquimbo," said John Jenkins, president of Bridgestone Firestone Chile. "The reality is that as market conditions erode for low-end or ´mass-market´ tires, the plant, which for several years hasn´t generated a reasonable return on assets, is now projected to begin losing a significant amount of money. New capital investment will not reverse the market forces that have created the competitive obstacles we are facing."

    BFS Chile, a subsidiary of Bridgestone Americas Holding Inc., will maintain a sales office in Santiago, Chile, to continue supporting its dealers in Chile, Bolivia and Peru. The subsidiary will in the future source tires for the markets it services from other BFS plants in Latin America.

    The Coquimbo plant, which began operations in 1975, was purchased by BFS in 1999. The company operated as Firestone Chile S.A., and the majority owners of the business sold their remaining interest in the company to BFS, which then owned 14 percent, for an undisclosed sum. The factory employed 500 at the time, and had sales of $50 million in 1997.

    The plant produces radial and bias ply passenger and light truck tires, truck and bus, and off-the-road tires. More than 70 percent of the tires made at the factory are in the low-end, shrinking, "mass market" segment and include bias ply tires that are unique to that market. The facility employs more than 470.

    Jenkins said BFS Chile will carry out the closing in full accordance with Chilean labor law. "We have contacted local government leadership, the union and the community to explain our decision as well," he said.

    The company did not disclose what costs it anticipates from the closing.

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