Based in Japan, Bridgestone Corporation is the world’s largest tyre and rubber company.
In Tokyo, the Bridgestone Corporation has slashed its earnings forecast for the year by 81%. The revised forecast is US$ 116 million, down from the August estimate of US$ 596.6 million. Bridgestone also said that it would take a US$ 750 million charge to cover the costs of the recall and possible lawsuits; more than double the original charge estimate of US$ 350 million.
General Motors, which currently uses Firestone tyres as OE equipment on some 14 different models will be changing some cars and trucks to other Bridgestone brands this summer. Nissan will be dropping Firestone from its US Altima saloon when it relaunches in September. Both manufacturers stressed that the tyres they use were not connected with the Ford/Firestone recall troubles. However, GM’s Terry Rhadigan says,” We want our customers to have peace of mind.”
Bridgestone has announced that it will supply tyres next year to competitors in World Grand Prix 500cc motorcycle racing, one year earlier than originally planned. The company only began testing the tyres this January, in conjunction with Kanemoto Racing; the team that will ride on Bridgestones next season, fitted to NSR 500 bikes from Honda Racing. Bridgestone has supplied tyres for 125cc racing for the past decade and the latest move is designed to enhance the company’s image in the ultra high performance tyre sector.
At the Geneva motor show, Bridgestone unveiled the Potenza S-03 Pole Position; its new flagship tyre for the super sports passenger car segment. Bridgestone says that the new tyre incorporates technology developed in the F1 arena. It replaces the S-02 series and will be on sale from April.
Bridgestone became the first winner of Ferrari’s President’s Prize, one of only two to be awarded to suppliers of Ferrari and Maserati, marking excellence and innovation. Ferrari President Luca di Montezemolo presented the award to Shoshi Arakawa, president and CEO of Bridgestone/Firestone Europe at a ceremony at Ferrari HQ. Also present was EC president Romano Prodi. The award was in recognition of Bridgestone’s role in helping Ferrari to the F1 Constructors’ and Drivers’ championships and for tyre development for Gran Turismo cars.
Bridgestone/Firestone UK has won the contract for the sole supply of tyres to the BRS commercial vehicle rental fleet. The fleet consists of around 3,000 vehicles, ranging from 3.5 tonnes to 44-tonne tractor units and will now follow a policy of using Bridgestone new and retread tyres. The three-year contract was won against fierce competition and it is the first time that BRS has used a single tyre supplier. The contract will be serviced through Truck Point, the 220-depot organisation of independent tyre dealers established by Bridgestone/Firestone UK.
Bridgestone President Shigeo Watanabe has said that the company is prepared to sue US regulator National Highway Traffic Safety Administration if that organisation were to order another recall of Firestone tyres. Last week the NHTSA asked Bridgestone/Firestone to recall more tyres, but the company refused, threatening court action if the NHTSA declared the tyres defective. At a news conference in Tokyo, Shigeo Watanabe again said that the investigation should focus on both tyres and vehicles. Fears over the possibility of protracted legal action were reflected in a fall of over 15 per cent in Bridgestone’s share price.
Yoichiro Kaizaki, in a circular letter to Bridgestone management, has made it clear, that the sum of up to 50 bn $ claim for damages referred to by some American attorneys is totally false. American subsidiary Bridgestone/Firestone Inc. has already made, according to Kaizaki, an initial charge of 450 million US-$ for the tire recall itself and has now pledged an additional reserve of 450 million US-$. This should be in accordance with what all involved counsels believe will be the maximum cost for the American subsidiary. There is no financial danger for Bridgestone/Firestone Inc. Obviously it is a question of American lawyers trying to increase public pressure on Bridgestone Japan with the intention of talking up the claims for damages in order to encourage an out-of-court settlement. Kaizaki has countered this by saying that from now on every baseless attempt to do this will immediately be discussed in public debate.
Ford has announced that it will replace up to 13 million Firestone tyres fitted to Ford Explorer SUVs. This is double the number of tyres recalled last year and the cost to Ford will be around $3 billion, with the exercise taking nine months. It was this decision which precipitated the announcement from Bridgestone/Firestone that it would sever all ties with Ford; an announcement which caused Bridgestone shares in Tokyo to fall by over 9 per cent.
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The US Government has asked Firestone to recall another 3.5 million tyres. Shigeo Watanabe, president of Bridgestone stressed that this was not a recall, but a replacement programme as Bridgestone Firestone had not admitted any defects. The tyres being exchanged are P235/75R15 and P255/70R16 fitted to Ford Explorers and Mercury Mountaineer SUVs up to 1998.
DAF models 45 and 55 and also the successor series LF will be fitted with Bridgestone R 227 tyres on the steer axle and M 729 on the drive axle. It is the first time that Bridgestone has been chosen on an exclusive basis in this middle class truck segment. The choice is part of a long term contract with Paccar, the American parent company of DAF. The trucks will be produced in the UK at the former Leyland plant.
The Tanzanian parliament was told yesterday that the Arusha-based General Tyre factory was coping with producing passenger car tyres but was failing to produce truck tyres. Government taxes on imported truck tyres were punishing domestic businesses which had little choice but to buy imported Bridgestone and Michelin truck tyres.
Bridgestone/Firestone UK (BFUK) has been presented with a “2000 Supplier Award” by JCB, one of only five companies to receive awards and the only tyre company to be nominated. The award was given for supply service, product quality, innovation and cost reduction. John Patterson, JCB’s CO, presented the trophy to Jim Wilson, MD of BFUK, at the JCB Suppliers Conference.
Whereas the incidence of car tyre retreading is slowly diminishing (in summer tyres this segment is virtually insignificant, in winter tyres market shares are falling dramatically and are approaching the ten percent mark), truck tyre retreading seems to be stable across Europe. But there are significant national differences especially regarding the incidence of retreading and the relationship between new tyres and retreads. Looking back over the last decade, not from the technological viewpoint but at the main players and their market shares, it was (before Michelin’s Recamic came on the scene) the Marangoni group (including Ellerbrock), which showed most growth. Kraiburg also showed positive development but the world’s no 1 in cold retreading Bandag showed signs of stagnation. If these three players have improved, strengthened or defended their market shares then there must also be losers, these being the new tyre producers who supplied the retreaders with materials for their business but especially the hot retreading. The four big players in the European truck tyre market (Michelin, Goodyear, Bridgestone, Continental) have tied up packages which should be regarded by the retreading specialists (like Bandag, Marangoni/Ellerbrock, Kraiburg) with some discomfort because the result is a lessening of their influence. New tyre manufacturers, retreaders and dealers find themselves as part of a package. The importance of retreaded truck tyres grows, while the importance of retreaders shrinks. The retreaded truck tyre is an integrated part of a very complex marketing concept. The retread is another item in a customer relation program, a marketing instrument, which is designed to lead to the sale of the next new tyre.
In the USA, the National Highway Traffic Safety Agency has reported another 29 deaths linked to alleged failures of Firestone tyres. This raises the total of fatalities under investigation to 148 and injuries to 525. Five of the 29 deaths involved Firestone tyres not included in the voluntary recall.
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