Bridgestone Steadies The Ship

Bridgestone Corporation is due to release its 2002 figures at the end of this week, and forecasts by industry analysts suggest that the company has achieved a remarkable comeback from the woes it suffered during the Firestone recall saga. Asked to predict the corporation’s 2002 results, the analysts forecast that net profit would more than double to 40.07 billion Yen ($332.

5 million) on a turnover of 2.24 trillion Yen. The net profit forecast takes account of a one-off charge of 30 billion Yen in order to strengthen group operations.

These figures, if correct, will mark the end of what has probably been the worst period in the corporation’s history, following the rash of rollover incidents involving Ford Explorers fitted with Firestone tyres. The consequences were severe; millions of Firestone tyres recalled, a mass of lawsuits from injured motorists and the severing of the 100-year old relationship between Ford and Firestone. Bridgestone’s North American operations slumped to a $1.

86 billion loss.But now Bridgestone is definitely back in business, with a new holding company structure in the USA and an injection of $1.3 billion for Firestone, plus the closure of a plant in Illinois.

Bridgestone has focused more on the Bridgestone brand in the US, while working on rebuilding the Firestone brand. The dealers showed remarkable loyalty to the Firestone brand, whose drop in sales was less than expected.However, it is not all good news, as the analysts were asked to look ahead and predict what lies ahead for Bridgestone in 2003.

They expect a bumpy ride, for the next few months at least, with higher raw material costs and a stronger Yen. Bridgestone is also expected to take a hit on pension fund expenses and demand in North America is predicted to weaken. Despite these, net profits are predicted to rise to 74.

5 billion Yen ($625 million).Facing sluggish demand in the USA and at home, Bridgestone has taken steps by restructuring its European operations. It plans to increase capacity at factories in Poland and Spain, inject extra capital into its European operations and concentrate more on the profitable high performance sector.