Firestone Liberia: ‘Cutting 800 Jobs Will Not Restore Profitability’

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Firestone: “Headcount reductions will accordingly take place throughout the company’s operations, and include retirements, the discontinuation of certain work contracts, and redundancies."

After a thorough and strategic review of its current operations in the country, Firestone Natural Rubber Company, an indirect subsidiary of Bridgestone Americas, Incorporated, has announced the difficult decision to reduce its workforce by 13% (approximately 800 employees) by early second quarter (Q2) of 2019 at the company’s Firestone-Liberia operation.

Headcount reductions will accordingly take place throughout the company’s operations, and include retirements, the discontinuation of certain work contracts, and redundancies.

“This action is necessary due to continued and unsustainable losses resulting from high overhead costs associated with the company’s Concession Agreement with the Government of Liberia, low natural rubber production because of the country’s prolonged civil wars and continued low global natural rubber prices,” the company said in a press release issued Monday afternoon, March 18, 2019.

Firestone-Liberia says it has been working closely with the Ministry of Labor and the Agricultural Agro-Processing and the Industrial Workers Union of Liberia (AAIWUL) to ensure that employees made redundant as part of this action will be done so in accordance with all applicable Liberian labor laws, company policies, and the company’s collective bargaining agreement with AAIWUL.

“Unfortunately, these measures alone will not be enough to restore Firestone-Liberia to profitability. As a result, the company will continue to evaluate all aspects of its business to ensure long-term competitiveness and determine the best allocation of company resources to optimize our portfolio, processes and culture,” the release said.

Company’s History

It can be recalled that Firestone Natural Rubber Company, LLC is a subsidiary of the Bridgestone Americas, Inc. Headquartered in Nashville, Tennessee, U.S., the company operates the largest contiguous rubber plantation in the world in Liberia which first opened in 1926 under a 99-yr. concession agreement that granted the company unlimited rights over one million acres of land for six US cents per acre.

As rubber demand went down during the 1980s, the company dismissed a number of 5000 workers, leading to the local antipathy to the company.

On June 6, 1990, during the first Liberian civil war, the resistance group, the National Patriotic Front of Liberia, commanded by its leader, now imprisoned former President Charles Ghankay Taylor, took over the Firestone Plantation and evacuated US personnel.

The exact nature of Firestone’s activities in the plantation between 1990 and 1997 remained unclear, but according to Donald Ensminger, then General manager of Firestone, “Firestone hired a young Liberian-born lawyer with impressive credentials. Gerald Padmore had graduated from Yale and then Harvard Law School. He had returned to Liberia to serve in President Tolbert’s government. As the acting minister of finance, he sat across the table from Firestone in rubber contract negotiations.

According to the TRC of Liberia Final Report, “rubber exports, especially by Firestone, continued throughout the conflict period without sanctions. The US Government made representations for the continuation of this trade during the conflict on behalf of Firestone. Firestone resumed full scale operations on January 22, 1992 pursuant to a memorandum of understanding signed January 17, 1992, with Charles Taylor’s NPFL awarding the NPFL US$2 million annually in exchange for NPFL’s protection. Firestone plantation was the launch pad for NPFL’s infamous, Operation Octopus’ attack on Monrovia and ECOMOG to unseat IGNU

In 1997, following the cessation of hostilities and the subsequent elections of Charles Taylor, the company restarted its operations at a third of capacity with 3000 workers. The company soon faced a number of violent protests, as its employees demanded better working conditions, better pay and resettlement benefits.

By October 2008, it was operating at half its capacity, withholding further investments until the government finally agreed to give the company a lenient tax status.

Current operations

In 2005, the Firestone Company and the Liberian government signed a new 37-year deal raising the lease to 50 cents per acre. In November 2005, the International Labor Rights Fund, representing “tappers” (workers who extract latex from rubber trees) on the Liberian plantation, filed an Alien Tort Claims Act (ATCA) case in US District Court in California against Bridgestone (parent company owning Firestone), alleging “forced labor, the modern equivalent of slavery,” on the Firestone Plantation in Harbel.

The lawsuit stated: “The Plantation workers allege, among other things, that they remain trapped by poverty and coercion on a frozen-in-time plantation operated by Firestone in a manner identical to how the plantation was operated when it was first opened in 1926.”

Firestone rejected these allegations, stating that the corporation has provided employment and pensions to thousands of Liberians as well as healthcare. The company also provides education and training opportunities to employees and their children.

In reply to the charge of exploitative child labor, management claims that workers are bringing their own children to work to assist them and that this is not endorsed by the company.

UNMIL’s Report

In May 2006, the United Nations in Liberia (UNMIL) released a report: “Human Rights in Liberia’s Rubber Plantations: Tapping into the Future.” According to the report, Firestone managers in Liberia admitted that the company does not effectively monitor its own policy prohibiting child labor.

UNMIL found that several factors contribute to the occurrence of child labor on Firestone plantations: pressure to meet company quotas, incentive to support the family financially, and lack of access to basic education. The report also noted that workers’ housing provided by Firestone has not been renovated since the houses were constructed in the 1920s and 1930s.

In response to the accusations of child labor and poor housing in the UN report, Dan Adomitis, President of Firestone Natural Rubber Company Liberia, stated: “well, in addition to the devastation that 15 years of civil war has caused, I think you need to understand another point—during the 2003 fighting, we had thousands of refugees come to Harbel for the safety that it provided. When those people came, they occupied any open area of land that was available. They put up temporary housing made out of mud, out of bamboo, out of thatch, out of tarpaulin, out of corrugated steel. Anything that they could do to get shelter. And those conditions still exist. They are not Firestone housing, but they are on our property.”

Meanwhile, with the news that the company is to layoff many of the employees, a recently pensioned employee has informed this newspaper that should the management institute the planned decision, with looming hardship in the country, many of the poverty-stricken Liberians will now have all cause to worry.

Another source said the pending action by the company is a ploy to discourage the government of President George Weah from any decision to review its previous agreement.

3 COMMENTS

  1. These days, it’s all bad news from Liberia. Investors don’t have confidence in Weah’s leadership. Some concession companies are scaling back or trying to sell their assets and leave. What a mess!!

  2. Phil,
    I couldn’t disagree with you more on this one. The only economic bad news that we’ve become aware of is the termination of 800 Firestone employees. What else is considered bad economic news? Investors will become skeptical if Weah’s critics and haters continue to paint an ugly picture of Liberia.

    In Ohio, a GM plant has been closed. That’s because GM is trying to save money and cut costs. If a manufacturing plant could close in an advanced country like the US, a similar situation can easily occur in a poor country like Liberia.

  3. Lots of politician believe they can fix the Liberian economy?
    NO, you are not able to fix anything because you do not have the KnowHow (experience).

    The quality of this product (like many others) has to be improved in the form of usable “Rubber Products, Tire Products, etc” by Liberian Chemical Engineers in order to compete on the world market.
    Again, where are the Liberian Engineers including those from the political parties with the ideas?

    The Engine of any modern economy is production which creates good Jobs. Liberia do NOT have an economy; instead Chaos everywhere? We have to go back to ABC on everything?

    Do not depend on Firestone for everything. Firestone has already done a lot. They will NOT create jobs in Liberia to make their people Jobless?
    God bless.

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