Warehouse deal a strong signal from Firestone
Firestone Agricultural Tire Division has strongly signaled that it intends to remain Des Moines’ top blue-collar employer with a proposal for a $24 million, 850,000-square-foot facility that would consolidate the tire maker’s global distribution warehouses under one roof near the new Interstate 35 exit south of Ankeny.
The division’s parent company, Bridgestone/Firestone Americas Holding Inc., could announce this week whether the project is a go, said division President Ralph H. Burchfield. The sprawling Des Moines factory, covering 57 acres off Second Avenue, is Bridgestone/Firestone’s oldest and largest, and the parent company threatened to close it three times as it struggled to remain afloat during the 1980s farm crisis.
“It’s a serious commitment,” Burchfield said. “One of the difficulties we’ve had with our parent company is that agriculture is so cyclical.”
Sweetening the warehouse proposal is Polk County’s offer of a graduated five-year tax-abatement package that would grant a 75 percent exemption in the first year and 15 percent in the fifth. State assistance through the Iowa Department of Economic Development’s New Jobs and Income Program would be triggered if 50 or more jobs with a median wage exceeding $12.38 per hour were created at either the factory or the warehouse.
With an annual payroll of $72 million and $20 million in spending with local suppliers, the Firestone Agricultural Tire Division is an important spoke in the local economy. The plant currently employs 1,248 laborers and 254 salaried workers, ranking it among the 15 largest employers in Greater Des Moines. Last year, the plant paid about $1 million in real estate taxes; $679,500 in state, county and city sales taxes; and $149,500 and $79,100 in state and federal unemployment taxes, respectively. This year, the plant will make $237,500 in charitable contributions, including $100,000 to Future Farmers of America, an organization the company hopes will supply it with a new generation of customers as it develops strategies to survive in the ever-changing landscape of agriculture.
A DES MOINES INSTITUTION
The manufacturer’s past as a Des Moines fixture is as bright as the glow the campus lights and trademark red Firestone sign have cast over the city’s North Side for six decades. Patriotism was brimming in 1944 when the factory was built. It was one of several plants quickly assembled after researchers from government, academic and industrial laboratories worked in collaboration with the big four rubber companies – Firestone, B.F. Goodrich Co., Goodyear Tire and Rubber Co. and U.S. Rubber Co. – to develop a synthetic rubber after the natural rubber supply from Southeast Asia was cut off at the beginning of World War II. Firestone and other key players in the industry rushed the material into production and, in record time, manufactured enough of it to meet the needs of the United States and its allies through the end of the war.
The factory was built on farmland when downtown Des Moines was only a distant spot on the horizon, but as the years passed, the Highland Park and Oak Park neighborhoods sprang up around it.
“There are lots of families who have lived in our neighborhood where the chief breadwinner was working at Firestone,” said John Morrissey, president of the Highland Park Neighborhood Association. “Many of those people are still there. Those folks built their neighborhoods and built institutions, and now they’re retired.”
“Everybody I know who was hired at Firestone was elated, happy and content,” said R.V. “Bob” Bianchi, a Firestone worker since 1968 and president of United Steelworkers of America Local 310, which represents workers at the plant. “They went about their business and started buying homes and cars.”
Landing a job at Firestone was a bonanza for a blue-collar laborer. The pay was the best in town. For many workers, the tire-building jobs at Firestone were the only ones they ever held.
Dan Albritton was 19 when he followed his father, a Firestone retiree, into the plant 31 years ago. “You were hired on, and you were there pretty much for life,” said Albritton, who’s currently on a leave of absence to attend to responsibilities associated with his job as president of the South Central Iowa Federation of Labor, AFL-CIO, which has 30,000 union members in a 15-county region.
In the almost 30 years between 1944, when the plant opened, to 1972, when Albritton was hired, only about 4,750 workers ever passed through its doors. Job satisifaction was high and turnover was rare. The jobs that did come open were primarily vacancies caused by retirement.
“If the rumor got out that Firestone was hiring, you’d have 200 or 300 people applying for 10 jobs,” Albritton said. “Today, it’s just the opposite.”
The work at Firestone is physically demanding – the tires the workers make range from the small, 18-pound tires for all-terrain vehicles, a new market for the company, to the 2,000-pound tires for big agricultural implements.
“I came here because several people who worked here said it was a decent place to work,” Bianchi said. “If you were willing to work hard, you got good wages.”
The jobs are still some of the best in the city for non-skilled labor, ranging from $11.69 to $24.46 per hour, with an average hourly rate of $20.76. Paid benefits bring total average hourly compensation up to $35.
But union stalwarts Bianchi and Albritton say only remnants of the Firestone of yesterday remain today. A strike in 1994 idled Local 310 for almost a year, further stretching already taut relationships between labor and management. Wage concessions made in the last couple of contracts resulted in higher turnover, something that was almost unheard of at Firestone years ago.
“At one time, before 1982, [the] Des Moines [factory] was the highest-paid tire plant in the world, and that’s not even close to being true today,” Bianchi said. “I’m not sure [Bridgestone/Firestone] doesn’t have non-union plants that make considerably more than we do.”
“In the early ’70s to the ’80s, you could make a living wage, and if you were married and had two kids, your spouse wouldn’t have to work,” Albritton added. “That, I would say, is not true today. I don’t you could get a wage high enough to raise a family of four.
“I don’t think Firestone minds the revolving door,” he said. “They’re paying less for more and don’t have the high pension and medical costs of retirement.”
The biggest labor-management disputes, though, aren’t about pay, but involve work rules and the 12-hour shifts Albritton said have chased a family-friendly atmosphere from the plant. Work schedules and attendance rules have made it more difficult for employees to find day care for their children, participate in their activities and volunteer in their communities. “It’s not a nice place to work,” he said. Although it had been a tradition of sorts for grandparents, children, grandchildren and great-grandchildren to all earn their livings at the plant, Bianchi steered his two sons away from their jobs at Firestone. “I suggested very highly that they leave Firestone and work someplace else,” he said. One son is now a Teamsters union truck driver for United Parcel Service, and the other is a union electrician.
Even retired workers who view their days at Firestone through the lens of nostalgia stay away from the plant today, Bianchi said. “A lot of the old-timers come down and visit the union hall,” he said, “but they won’t go in that factory because they know what’s going on.”
The past two decades have been tumultuous for the manufacturer of “the farmers’ tire,” made for and frequently by farmers, who in a search for off-farm income, are willing to commute up to two hours to work the night shift at the Second Avenue plant.
Negotiations for a three-year contract between the Steelworkers and Bridgestone/Firestone begin this spring. Burchfield says responsibility for the frayed relationship with labor lies on both sides of the split. “This plant has gone up and down in labor negotiations, and both sides are at fault,” he said. “It’s a difficult market. We went through a couple of years where we were losing quite a lot of money in the business, and we had to make ourselves more efficient.”
But he’s confident the parent company will choose, as it did in 1982, 1985 and 1987, not to shutter the Des Moines plant, regardless of what is decided about the proposed global distribution center. After hemorrhaging cash for two years in a row, the Des Moines factory has clawed its way to the top of the agricultural tire market.
Bridgestone/Firestone has invested $63 million in the Agricultural Tire Division since 1998, and it now supplies 50 percent of the replacement agricultural tire market. “Prior to 1997, there was a danger this plant would close, but in the last five years, we’ve brought it back to profitability,” Burchfield said. “We’ve gained market share to the level where we probably should have been all along.”
The 700,000 pounds of tires produced at the Des Moines plant each day contribute about $350 million annually to the $8 billion earned by Bridgestone/Firestone, a subsidiary of Bridgestone Corp., a $20 billion company. The division is profitable, but Burchfield still takes nothing for granted in a struggling agricultural economy.
He saw his own family’s farm near Dayton, Ohio, gobbled up in urban sprawl and is keenly aware of the shifts Firestone must make in response to the changing dynamics of agriculture. With brand identity already seared into the minds of farmers, Firestone was able to leapfrog to the top of the market with higher technology to match the needs of the bigger, more complex farm equipment used as farms become larger and are controlled by fewer people.
“You have to stay ahead of the market curve and stay ahead of technology,” Burchfield said. “It hasn’t been easy for us, for John Deere, for Case or for any of the other boys.”
Pressure on the plant to maintain profitability also comes from sources outside agriculture. U.S. manufacturing is already endangered as operations are increasingly moved to foreign countries. The trend warrants more than passing concern among employees of the Des Moines tire maker, one of 38 production plants owned by Bridgestone/Firestone Americas Holdings Inc., established in 1988 when Japan-based Bridgestone Corp. acquired Firestone Tire and Rubber Co., the company 31-year-old entrepreneur Harvey Firestone founded in Akron, Ohio, in 1900 after he discovered a new way to make carriage tires.
Bianchi and Albritton fret about manufacturers’ exit from the United States to areas where they can hire laborers for just pennies on the dollar. “How do you compete with that?” Bianchi said. “Fair trade is one thing, but that only happens when everyone is working on the same.”
The union officials get no argument from Burchfield, who moved the executive offices from the downtown Des Moines to the Second Avenue plant when he was named president of the Agricultural Tire Division two years ago.
“Shame on us if we pull this plant out and put it in Mexico without trying to put changes in place,” he said. “It’s not the workers’ fault, it’s the management’s fault, because we make the best farm tire in the world.”
On both sides of Second Avenue, in the factory and executive offices on the west side and in the Local 310 union hall on the east side, the challenges facing the venerable Des Moines manufacturer are never far from anyone’s mind.
Burchfield turns his thoughts to how to make the plant more efficient, a key reason behind the proposal for the global distribution warehouse that will replace owned and leased space located in a five-mile radius of the plant. The 850,000-square-foot warehouse, and the 550,000 square feet of warehouse space on the Firestone campus, will accommodate lower inventories that increase profits.
“We have to stay ahead by being more efficient,” he said. “In the long term, that’s a challenge. We have to keep generating a profit, and that’s getting more and more difficult.”
“I’d like to think this plant will be here for many, many years, but a lot of it revolves around the family farm,” Albritton said. “They’ve been real loyal consumers of American products. A farmer likes to know where his tractor tire was built, but as we keep moving toward factory farms, they won’t care where they get them. As factory farmers increase, small farmers get squeezed out.”