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(This is an English translation of this Japanese journal's
report referencing the Taylor case handled by Roberts
& Roberts.)
Tough Times Continue for Bridgestone/Firestone
(Written by Koichi Sakai-New York Bureau Chief)
On November 1, Bridgestone/Firestone (BFS) CEO John
T. Lampe attended the annual meeting of tire dealers
in Las Vegas. After what the company has been through
over the past several months, he was greatly relieved
to gain the attendance of approximately one-third of
the 13,000 dealers that sell BFS tires in the U.S.
It was in 1988 that Bridgestone acquired the ailing
Firestone. Bridgestone spent over ten years to transform
it into a blue-chip company with sales of over US$7.5
billion and pre-tax profit of US$300 million. Although
people at one time praised BFS as the only successful
case of a Japanese company acquiring a U.S. company,
recent reports on how poorly the company has been addressing
its tire problem has compromised such reputation completely.
In order to restore BFS, Bridgestone President Yoichiro
Kaizaki appointed Lampe as CEO, in place of Masatoshi
Ono who he had sent from his company. As the first American
ever to lead BFS, Lampe has already renovated the company
organization and is working with Vice Chairman Isao
Togashi and other Japanese executives to regain consumer
trust. The two key management strategies that Lampe
has hammered out to this end are to rebuild the Firestone
brand that was damaged by tire recall and to enhance
product quality by analyzing the root cause of the tire
problem.
Whether BFS can be re-established successfully will
depend largely on the sale of replacement tires for
passenger vehicles. Despite such strong rivals as Michelin
and Goodyear Tire & Rubber, BFS boasts 20% share
of this market. According to a UBS Warburg analyst,
the company's strength in this arena owes to the strong
confidence that exists between the maker and the dealers.
And what made this possible is the investment strategy
that Senior Vice President Shuichi Ishibashi and Vice
President John Gamov have been promoting.
The established theory, as far as sale of tires is
concerned, is that 70% of the consumers will buy tires
according to the clerk's recommendation. With this in
mind, Ishibashi has been working hard to establish closer
relationships with 15,000 BFS-affiliate tire dealers
so that their clerks would recommend BFS tires. Gamov,
on the other hand, has been making a tour of independent
tire dealers to support their sales activities both
physically and mentally. And it meant a lot to the tire
dealers when, at the aforementioned November meeting
in Las Vegas, Ishibashi and Gamov asserted that customer
confidence could be regained.
On the quality management side, reform is being promoted
under Vice Chairman Togashi's leadership. The goal is
to achieve product quality equal to that of Bridgestone,
as Bridgestone President Kaizaki has a suspicion that
BFS plants may not have been so good as Bridgestone
plants . Lampe, on the other hand, says that he will
have the production process of BFS plants reviewed and,
to this end, several Japanese executives have been sent
to BFS from Bridgestone.
What the customers really wish to know, however, is
why the tire problem happened in the first place. Unless
this answer is given, they will not feel comfortable
about buying BFS tires again. And it won't be easy for
Lampe to lead his company to giving a satisfactory answer,
because he is not on the board of Bridgestone although
he is CEO of BFS and Togashi, who works for Lampe at
BFS, is in fact a member of the Bridgestone Board. In
addition, there is also the problem of communication
due to language barrier. Lampe, nonetheless, shows
confidence over reconstruction of BFS.
Reconstruction of Bridgestone/Firestone will also
depend on the turnout of over 180 lawsuits being filed
against the company. And the people who are suing BFS
are feeling despair, not being told what caused the
accident and the poor manner with which BFS has been
handling their cases. Kathy
Taylor in Dallas, Texas is one of such people. She lost
her daughter in 1998 in an accident that happened while
driving a Ford Explorer wearing BFS tires. She had had
her car checked regularly and replaced the tires shortly
before the accident . Knowing that the accident was
caused by tread separation, she filed a lawsuit against
Ford and BFS in March 1999.
Kathy's sorrow turned to rage
when BFS announced its recall of tires in August 2000.
She was angered by the fact that BFS neglected to tell
American citizens that the company had been recalling
its tires in Saudi Arabia and Venezuela since 1999.
She was also angered by the fact that BFS did nothing
against the 1,000 tire-related complaints that it received
in the 1990's. And most of all, she was shocked by the
fact that it was only after the tire problem became
a national topic that she came to know about the 1996
accident in Houston, Texas that killed a journalist
who was driving his Ford Explorer.
Bereaved families and consumers want
to know why BFS never spoke out about the tire problem.
And because BFS continues to fail to explain this point
at public hearings and press conferences, people's anger
has been mounting. Although comments and remarks made
by the top executives of BFS seem to point that they
thought the tires weren't as dangerous as something
that required a warning to the customers, this presents
a suspicion because BFS is known to have received numbers
of letters describing a tire problem. Some of them are
too long to be written into a BFS-designated form, while
others come with pictures and illustrations. Nonetheless,
not only BITS but also Bridgestone insist that no signs
of trouble were reported until May 2000.
BFS is not the only defendant of lawsuits involving
the tire problem and there are at least two cases that
include the name of Bridgestone . This number may increase
as people start to realize the limits of what BFS could
pay to compensate the victims. Without disclosure of
information about why there were delays in alarming
the users as well as in taking countermeasures, in addition
to the root cause of the tire problem, all the lawsuits
being filed against BFS and Bridgestone will certainly
not turn out in their favor.
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