Bridgestone CEO's goal: Regain credibility

TOKYO - The split was as bitter as it was dramatic. Stung by Ford Motor Co.'s unilateral recall of 13 million of its tires for alleged safety defects, Bridgestone/Firestone Inc. in May severed its nearly century-old ties with the carmaker, telling its biggest OEM customer it could no longer do business with a company it didn't trust.

But the split marked more than the end of a business relationship: The companies are tied by blood. The mother of Ford Motor Chairman William Clay Ford Jr. is the granddaughter of Firestone founder Harvey Firestone, who was a lifelong friend of Ford founder Henry Ford.

Now, the CEO of Bridgestone/Firestone's parent, Bridgestone Corp. of Japan, says it's time to patch things up. In an interview with Staff Reporter Yuzo Yamaguchi in Tokyo, Shigeo Watanabe said it's "obvious" the time has come "to move in the direction of reconciliation."

The 59-year-old Watanabe, who took the helm of Bridgestone in March, also said he is mapping plans to reposition Bridgestone in the United States as a volume aftermarket brand in a bid to offset damage done to the Firestone name by the recall.

Have you been in contact with Ford Chairman William Clay Ford Jr. about a possible reconciliation?

Ford Motor has not contacted us. But at the press conference announcing the appointment of Mr. Ford as CEO, both he and COO Nick Scheele stated their desire to restore relations with suppliers. We appreciated the message.

You have said you are willing to talk with Ford Motor Co. if it desires to do so. Will you take the initiative to start talks?

Well, there's no reason for us, as a supplier, not to visit a customer and greet their new management. We don't have a concrete plan, though. But it's natural that I should visit them. John Lampe, president of Bridgestone/Firestone, also should go.

Does this mean you're moving toward reconciliation?

Of course. Ford sent us that message at their press conference, although it was indirect. It's obvious that we need to make efforts to move in that direction.

When will you visit Ford Motor Co.? By year end?

I haven't decided. But, in common-sense terms, yes, by the end of this year.

Have you conveyed your intentions to them?

No, I have not.

Do you think the management changes at Ford Motor Co. - the replacement of Jacques Nasser as CEO - will make it easier for you to rebuild ties with them?

Yes, I think so. It's natural to think so. But we won't change our core argument that our tires should not solely be blamed for the recall problem and that both tires and the vehicles should be investigated. We can't yield on that.

Would you meet with both Mr. Ford and Mr. Scheele?

I don't know yet. I think they will decide who should meet with us after we convey a desire to visit them through our office in Detroit, but I think Mr. Scheele will be responsible for operational management. If I can meet with him, that would be best.

Are you still asking NHTSA to investigate the Ford Explorer?

NHTSA said earlier that they have officially accepted our proposal to investigate the Explorer. Dr. Dennis Guenther, professor of Mechanical Engineering at Ohio State University, is investigating Explorer safety, and he will submit his report to NHTSA when he's done. NHTSA said it's waiting for the report. So we are not going to give NHTSA another push to work on an investigation because it's already going on.

Would it be an obstacle to reconciliation if Ford Motor Co. refuses to investigate the Explorer?

Well, I don't know right now. First, I just want to meet them because they have changed management. Once I meet with them, then we may talk further.

I think you said earlier that you would not reimburse Ford Motor Co. for tires that the automaker already recalled on its own. Am I correct?

We are replacing recalled tires at our expense because we replace them with our own tires. But if Ford replaced tires on its own before the government ordered a recall, they probably replaced them with non-Bridgestone tires. So I think it's illogical to cover costs associated with tires they replaced.

What if Ford Motor Co. argues that you should pay for some of the tires that Firestone would have had to recall under government edict?

I can't answer that right now, but I will discuss it with Ford.

Has Ford Motor Co. already contacted you to ask for repayment for some of the tires it already replaced?

No, it hasn't. The media reported something about how the two companies were in talks about a repayment of $3 billion or something, but it's not true.

Firestone's sales of replacement tires in the U.S. market in the first half slid 40 percent in value from a year earlier. How are the recent sales, and what's your outlook for the brand?

Sales have not been as bad as that recently. We're now trying to push the Bridgestone brand in the U.S. We are trying to expand Bridgestone into the mass market by adding new products next year.

Bridgestone is a premium brand in the United States. If you shift to Bridgestones, how do you cover the mass market? How many new Bridgestones will you introduce?

Two or three kinds for the mass market.

Will that change the Bridgestone-to-Firestone sales ratio from the current 50-to-50?

I'm telling our people to let the market decide but, yes, it's possible that the mix will shift to up to 60 percent Bridgestones over the next year.

What are you doing to make Firestone quality match Bridgestone's?

We have set a worldwide standard for quality for all brands, and we have set up three teams from development, production and quality assurance to enforce it. We have invested some 5 billion (or $41 million at current exchange rates) for the program in North America this year.

You showed a tire-pressure monitoring system at the Tokyo Motor Show in October. When do you plan to put it on the market, given that the U.S. government is moving to legislate the installation of such systems?

We're still developing the system, but we're aiming it at the replacement market after 2003. The success and likely price of this kind of a system depends on how much we can miniaturize it.

What's a primary feature of your system?

Our product is smaller and lighter than others.

Are you planning to cut costs more after you shut down the Decatur, Ill., plant, in December?

We already are cutting employees as we wind down the Decatur plant. And we had been laying off some people at our plants in Tennessee and Oklahoma, but we are now calling some people back at those plants. So we don't have any more plans to cut more people.

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