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December 12, 2000 01:00 AM

Ford-Firestone split unlikely, analysts say

Sherri Begin, Crain News Service
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    DETROIT (Dec. 12, 2000)Despite their strained relations, Ford Motor Co. and Bridgestone/Firestone Inc. probably won´t part ways altogether, analysts say.

    "In time, Firestone will be able to recertify the efficacy of their products... They will work hard to rekindle the relationship, which has temporarily been strained," said Saul Ludwig, an analyst at McDonald Investments Inc. in Cleveland.

    John Lampe, Bridgestone/Firestone chairman, president and CEO, also expressed guarded optimism the company will have a future business relationship with Ford.

    "We continue to work very closely with Ford," Mr. Lampe said. "They´re an important customer; we´re an important supplier. We want to do everything possible to continue this fine relationship we´ve had for 96 years with Ford."

    Ford declined to comment, saying the topic was a sensitive one.

    "One of the things that really all sides want to do is let this all quiet down," said David Cole, managing partner and director of the Center for Automotive Research at the Environmental Research Institute for Michigan in Ann Arbor. "They want to have some return to normalcy so they can work out their relationship."

    Mr. Cole predicts the two will continue to do business, but it will never quite be the same. "Even though there is an historical tie, (the future) is going to be based on business decisions," he said.

    Not in the spotlight themselves, other car makers remain unruffled by the flurry of bad publicity and negative sentiment afforded Bridgestone/Firestone. "We haven´t had the problems the other company has had, so they are a valued supplier to us," said Dick Gratz, quality assurance manager of Tire-Wheel Systems for General Motors Corp.

    Bridgestone/Firestone supplies 100 percent of the tires for GM´s Saturn division. General Motors has Firestone Wilderness tires of a different size than those recalled on several of its sport-utility vehicles and light trucks, Mr. Gratz said. "But we have seen the data, and we have not seen anything that might indicate a problem."

    UBS Warburg L.L.C., a global equity research firm, doesn´t believe Ford will ostracize Bridgestone/Firestone completely because of its part in making other tire manufacturers competitive on pricing. But Ford will look for atonement, the company believes.

    "Given the strife between the two companies, it is highly likely that Ford would wish to punish Firestone to some degree," UBS Warburg said in a recent report on the tire maker.

    In doing so, Ford could take away as much as half of the original equipment business supplied by Bridgestone/Firestone and redistribute it among other tire makers, the firm said.

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