NASHVILLE, Tenn.-1993 was the most important 12 months in the 93-year history of the Firestone brand, Bridgestone/Firestone Inc. told attendees at its annual meeting of commercial tire dealers. ``Some even call it `the year of the rebirth of the Firestone brand,' '' said Sunil Kumar, BFS executive vice president and president of BFS Tire Sales Co., addressing more than 250 dealers at the March 15 gathering in Nashville.
Mr. Kumar listed several achievements impacting the Firestone brand last year. Among these were:
A dramatic increase in the Firestone brand's market share in 1993-reversing a 10-year decline;
Firestone's re-entry as an original equipment tire on General Motors Corp. cars and light trucks. During the year, GM expanded its use of Firestone tires-previously limited in the U.S. only to its Saturn cars-to several light truck models;
Kmart Corp.'s decision to sell Firestone tires in its 2,500 U.S. retail stores;
BFS' re-purchase late last year of the former Firestone tire plant in Bloomington, Ill., from Edwards-Warren Tire Co. (dba America OTR);
Market penetration of truck stop chains, such as National Auto Truck Stops and Truck Stops of America, making Firestone the dominant brand within that channel of distribution;
Introduction of a ``steady stream'' of new products, including the FR680 and FR440 all-season passenger radials, and the Firehawk ATX all-terrain light truck tire.
BFS also added 50 sizes to its Firestone agricultural and forestry tire lines, making Firestone ``the only full-line supplier'' of such tires in North America, Mr. Kumar said;
The company's return to motorcycle tire production via a new Firestone tire developed expressly for Harley-Davidson Inc. motorcycles; and, most important in Mr. Kumar's opinion:
The announcement of Firestone's forthcoming return to Indy Car racing in 1995 after a 20-year absence.
``This will revitalize Firestone as a mainstream American tire,'' Mr. Kumar said. ``...Ten years from now, when we look back at our company, this will prove the most impactful decision and program undertaken by our company in 1993.''
Meanwhile, the past year also ushered in several important changes for the Bridgestone brand as well, including:
New products and technologies, such as the Blizzak snow tire and Expedia run-flat tire system, and;
The addition of Montgomery Ward & Co. as a major new distribution channel for Bridgestone-brand passenger tires.
``In truck tires, we don't believe we need to add any new channels with the Bridgestone brand,'' Mr. Kumar told applauding dealers at the meeting.
During his part of the presentation, Walt Weller, executive director of truck tire sales, noted that BFS cancelled 600 national accounts last year and declared a moratorium on signing new fleet customers-explaining that it already had relationships with all the major truck fleets in North America.
Mr. Weller said the company has a similar moratorium on signing new dealers for both brands in an effort to safeguard the profitability of existing dealer franchises.
For BFS as a whole, 1993 also marked significant accomplishments, according to Mr. Kumar.
In a year when U.S. shipments of radial replacement and OE passenger tires combined increased by approximately 5 million units, the company's own sales were up 4.5 million units, said Mr. Kumar, meaning BFS accounted for nearly 90 percent of the increased radial units industrywide.
Likewise, the company's unit growth in commercial tires also outpaced that of the U.S. industry as a whole, he said.
Mr. Kumar said BFS' replacement sales increased 13 percent vs. 9 percent for the industry, and the company's OE units were up a whopping 37 percent compared with 21 percent for the industry overall.
The same was true in Canada, where the company's unit growth also outpaced that of the industry as a whole, he said.
Not surprisingly, all these improvements added to the company's bottom line, Mr. Kumar pointed out.
BFS' North American sales increased 10 percent to $5.1 billion-as the company's U.S. and Canadian operations became profitable for the first time since the former Firestone Tire & Rubber Co. was acquired by Tokyo-based Bridgestone Corp. in 1988.
It was, in Mr. Kumar's words, ``a beautiful, albeit small, profit'' of about $6 million, amounting to a $150 million improvement over the previous year's loss-and a $350 million recovery from the even bigger loss recorded in 1991.
While obviously a step in the right direction, last year's profit represented only about 0.5 percent of the company's sales, Mr. Kumar acknowledged, which compares with earnings-to-sales ratios of 10 percent for Cooper Tire & Rubber Co. and 5 percent for Goodyear.
As for the future, Mr. Kumar said he looks for steady growth in replacement truck tire sales both for the company and the industry as a whole.
``As far as your business is concerned,'' he told commercial tire dealers, ``we believe the amount of competition you face will decrease, because very few new entrants are becoming truck tire dealers.
``In spite of all the challenges, we do believe that all of us can continue to increase both our sales and our profits in this business,'' Mr. Kumar said.