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November 12, 2001 01:00 AM

Bridgestone CEO willing to discuss recall costs with Ford

Yuzo Yamaguchi, Crain News Service
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    TOKYO (Nov. 12, 2001)- - Bridgestone Corp., parent of Bridgestone/Firestone Inc., last week extended a slender olive branch to Ford Motor Co. in a bid to patch their bitter split over Ford´s decision to recall 13 million Firestone tires.

    In an interview conducted by Automotive News, Bridgestone CEO Shigeo Watanabe said he would be "willing to listen" to arguments that Bridgestone repay Ford for tires it would have been required to recall under a government order but that Ford recalled first.

    In October, the National Highway Traffic Safety Administration ordered Firestone to replace 3.5 million more tires, but Bridgestone believes only 768,000 of those tires remain in service. The tire maker also assumes Ford already recalled half of those tires, meaning that Bridgestone will replace only the remaining half.

    Asked how he would respond if Ford argues that Bridgestone should pay for replacing some of the tires that Firestone would have had to recall under the latest government edict, Mr. Watanabe answered: "I can´t answer it right now, but I would discuss it" with Ford.

    Mr. Watanabe denied media reports that he and Ford already have been in contact. But he said he hopes to visit Ford headquarters in Dearborn, Mich., before year end for talks with COO Nick Scheele in an attempt to rebuild bridges to the U.S. auto maker.

    His visit - Mr. Watanabe did not make clear whether he already has asked for an invitation - could mark the first high-level talks between the two companies since they terminated their century-old ties in May.

    Mr. Watanabe said he was motivated to seek peace by the stated desire of Ford´s new CEO, William Ford Jr., to rebuild relations with its business partners, dealers and suppliers.

    "That´s a chance" for us to get closer, he said.

    Reconciliation, if realized, could aid both of the former partners, given the shaky outlook for the U.S. market.

    Bridgestone/Firestone counted on Ford for 4 percent of its total sales of $7.55 billion in 2000.

    And for Ford, having Bridgestone/Firestone back as a tire supplier could give it more price-negotiating leverage with its other tire suppliers.

    In addition, a reconciliation "could help restore the tarnished brand image of both," said Masahiro Yamaki, an analyst at Quick Business Research Institute Corp. in Tokyo. "It would take years and years to rebuild their image if they keep fighting."

    Mr. Watanabe also said Bridgestone will launch an aggressive marketing campaign in the U.S. market.

    Bridgestone — considered a premium brand in the United States — will expand into the mass market for the first time, he said.

    To help offset the damage to the Firestone brand, it plans to bring two or three kinds of new Bridgestone tires to the North American replacement market in the spring.

    It expects the plan to shift the North American sales ratio of Bridgestone-to-Firestone tires to roughly 60-to-40 from the current 50-to-50.

    Yuzo Yamaguchi writes for Automotive News, a sister publication of Tire Business.

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