Return To Number One Ranking For Bridgestone
Figures published by US journal Rubber & Plastics News for the year 2000 show Bridgestone back at the number one position for global tyre companies, with tyre sales of almost 14 billion US Dollars.
Based in Japan, Bridgestone Corporation is the world’s largest tyre and rubber company.
Figures published by US journal Rubber & Plastics News for the year 2000 show Bridgestone back at the number one position for global tyre companies, with tyre sales of almost 14 billion US Dollars.
Bridgestone/Firestone UK has renewed its four-year deal to exclusively supply logistics company Hays Logistics UK with new and retreaded tyres. Hays operates a fleet of two thousand vehicles and trailers and the deal is worth around 1 million Pounds a year. Service will be provided by the Truck Point network of independent tyre dealers.
During a press conference held in Milan, Pirelli boss Tronchetti Provera did not give much away and remained vague. The company’s strategy will focus more on high technology and telecommunications in the future, but Tronchetti Provera stressed that he could not be more precise until he has made up his mind and seen all there is to see in Telecom Italiana. He said that he would focus on debt reductions as quickly as possible. Some parts of Pirelli are now for sale; a small part of the cables and the truck tyre division, for which Pirelli hopes to collect around 2 billion Euro. The passenger car and motorbike tyre division is not for sale. There are rumours that Pirelli is in talks with Michelin and Bridgestone. Of the two remaining major manufacturers, Continental may not have the money, as the group is already planning other take-overs, and Goodyear already has sufficient production capacity.
Bridgestone/Firestone has issued the results of its four month investigation into the accidents in the USA involving certain Firestone tyres. A number of causes were identified, including unspecified manufacturing problems at Decatur, tyre design in the shoulder area, driver abuse (travelling too fast and at the wrong pressure) and the weight of the Ford Explorer vehicle, particularly an alleged uneven weight distribution on the back axle. Ford denies that the margin for error between the load capacity of the tyres and the weight of a fully-laden Explorer is too slim.
In South Africa, Ford and Bridgestone/Firestone have announced that the split between the two companies in the USA will not affect their 50-year relationship. Ford SA’s director of corporate affairs Craig von Essen said that the recall problem was a matter for the US companies and that, as far as the South African company was concerned, it was “business as usual”. Bridgestone supplies South African companies with ATX and R45 Wilderness tyres, manufactured locally. As well as Ford SA, it supplies tyres to BMW SA, Toyota SA and Nissan SA.
Turnover rose by 3.7 per cent, but the group announced a loss for the first half year of 280 million Euro. This is the result of the fatal recall and all the other costs from Bridgestone Firestone in the USA. Despite all the bad news, the management was confident that it would show a profit at the end of this year of around 80 million Euro. In the US, the group is not expecting to show a profit before the second half next year.
According to JD Power Asia Pacific 2001 India Tyre Survey, Bridgestone lead the market in customer satisfaction. The survey compares satisfaction with OE tyres at 12-18 months of ownership. The Bridgestone brand comes top in three out of four elements of the survey, appearance, traction and performance. Six tyre manufacturers and eleven vehicle manufacturers were involved in the survey.
At a press conference, Bridgestone President Shigeo Watanabe revealed that the company was to close its plant at Decatur, Illinois, where 1,500 people are employed. The plant closure will lead to a loss of $210 million, offset to some extent by cost savings of $100 million. Bridgestone will also incur an additional special loss this year, amounting to $549.6 million and the group has revised its worldwide consolidated net profit forecast from 48 billion Yen to 10 billion. For Bridgestone Japan, the company is predicting a net loss of 130 billion Yen for the calendar year 2001, the first loss for the group since it was first listed on the Tokyo Stock Exchange in 1961. Bridgestone’s shares fell nearly 2 per cent on the news, to stand at 1,273 Yen.
On the day when Ford is expected to announce a cut in dividend, there are press reports that the car manufacturer is contemplating legal action against Bridgestone for compensation of costs associated with the recall of tyres instigated by Ford. It is suggested that Ford has been involved in negotiations on this subject with Bridgestone in Japan, bypassing the company’s US subsidiary.
The world’s most important exhibition for equipment in the building, construction, mining and quarrying industries is “Bauma”, which was held in the beginning of April in Munich. On 2000 stands many vehicles from this segment were exhibited – equipped with very specialised tyres. Not all the tyre manufacturers are involved in this segment, for which the abbreviation EM is common, standing for earthmover tyres. The most important producers of EM tyres are Bridgestone, Michelin, Goodyear and Dunlop who showed sections of their current programs on their own stands. Some other tyre brands were fitted on the machines featured on the stands of vehicle manufacturers, but the four above-mentioned brands dominate the market. One trend in earthmover tyres is radialisation, but cross ply tyres are still in use. Low profile tyres and low-pressure technology are the most modern developments. The specialised tyre manufacturers want to be able to equip virtually every construction and mining machine, from skid-steer and compact loaders to the biggest trucks, to provide the customers with economic solutions and optimum efficiency.
In the US, a federal judge turned down lawyers’ requests to order a recall of Ford Explorers and Firestone tyres. The judge ruled that only the National Highway Traffic Safety Administration has the authority to order such a recall. Bridgestone/Firestone has already indicated that it would fight any such order from the NHTSA in the courts. In a rare moment of unanimity, both Ford and BF Inc. welcomed the judge’s decision.
Following the profits warning issued by Bridgestone, the company’s directors have taken a 30 per cent pay cut for four months and there will be no bonuses for senior executives. President Yoichiro Kaizaki said that there are no plans to reduce wages of workers in the USA, despite the fact that Firestone is expected to record a loss this year of US$ 500 million. Looking at the prospects for the Bridgestone group, Mr. Kaizaki predicted a net profit for 2001 of 48 billion Yen.
The fall out from the Firestone/Ford debacle may not only assist tyre manufacturers in increasing market share at the expense of Bridgestone Firestone, but the natural rubber market may see a boost in demand. An estimated 39,000 tonnes of natural rubber will be needed to replace the 13m tyres being recalled. Traders expect prices of natural rubber to start rising as production is increased to meet the sudden demand for replacement tyres.
Bridgestone/Firestone Inc. has acquired a majority shareholding in Morgan Tire & Auto. This equity has, after it purchased rival Tire Plus Limited in the summer of last year, more than 550 depots in 24 states of the USA and was second biggest independent equity in the USA, referred to as a “retail-powerhouse”. Turnover of Morgan Tire & Auto exceeds 800 million Euro. Larry Morgan, who began his career as an employee of Firestone, remains CEO. The acquisition is a clear sign that, despite the Firestone recall disaster in the USA, the tyre manufacturer intends to stay in the market with the Firestone brand.
The Consumer Group Public Citizens is urging Bridgestone-Firestone/USA to recall another 7 million “Wilderness” tyres and is citing an alleged 1,000 consumer reports. The management of the tyre manufacturer insists that all Firestone tyres are safe and that a recall is not necessary. Only a few weeks ago the same group strongly urged Goodyear to recall 13 million Goodyear tyres which are, according to the files of the consumer group, not safe. Goodyear also refused to do so, claiming that the products are perfectly okay.
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