TOKYO (Nov. 30, 2001)—The top executives of Bridgestone Corp., parent of Bridgestone/Firestone Inc., and Ford Motor Co. met in Honolulu the weekend of Nov. 17-18 in a step towards reconciliation after the two companies had severed ties over the recall of Firestone tires on Ford Explorers.
Shigeo Watanabe, Bridgestone's CEO, met with Ford COO Nick Scheele, according to Taiji Nishijima, a Bridgestone spokesman. The meeting marked the first high-level talks between the two companies since they terminated their century-old supply relationship in May.
“It seems like they had amicable discussions,” said Mr. Nishijima, who declined to provide other details about the meeting.
Bridgestone and Ford, the world's second-largest auto maker, agreed to have further meetings, with Bridgestone/Firestone Chairman and CEO John Lampe participating next time. Those talks haven't been scheduled yet.
According to a Reuters story published in Automotive News, analysts believe the talks between Mr. Watanabe and Mr. Scheele centered on Ford's demand for cash to cover the cost of its massive recalls of Firestone tires. The Dearborn, Mich.-based car maker has spent $2.6 billion on a program replacing 13 million Firestone tires on Ford vehicles since last year.
While confirming the Honolulu meeting took place, Ken Kitawaki, a Bridgestone Corp. spokes-man in Bridgestone/ Firestone's Nash-ville, Tenn., headquarters, declined to comment to Tire Business on the content of the discussions, other than to call the meeting “meaningful, fruitful and productive.”
The companies' split has been as bitter as it was dramatic. Stung by Ford's recall of its tires for alleged safety defects, Bridgestone/Firestone told its biggest original equipment customer it could no longer do business with a company it didn't trust.
But the split marked more than the end of a business relationship: The companies are tied by blood. The mother of Ford Chairman William Clay Ford Jr. is the grand-daughter of Firestone founder Harvey Firestone, who was a lifelong friend of Ford founder Henry Ford.
In an interview published recently in Automotive News, Mr. Watanabe said it's “obvious” the time has come “to move in the direction of reconciliation.”
The interview with Automotive News, a sister publication of Tire Business, took place Nov. 6. The 59-year-old Mr. Watanabe, who took the helm of Bridgestone in March, also said he is mapping plans to reposition Bridgestone in the U.S. as a volume aftermarket brand in a bid to offset damage done to the Firestone name by last year's recall.
The following, in question-answer format, is the interview with Mr. Watanabe:
Do you think the management changes at Ford—the replacement of Jacques Nasser as CEO—will make it easier for you to rebuild ties with them?
Yes, I think so. It's natural to think so. But we won't change our core argument that our tires should not solely be blamed for the recall problem and that both tires and the vehicles should be investigated. We can't yield on that.
When will you visit Ford? By year end?
I haven't decided. But, in common-sense terms, yes, by the end of this year.
Have you conveyed your intentions to them?
No, I have not.
Are you still asking NHTSA to investigate the Ford Explorer?
NHTSA said earlier that they have officially accepted our proposal to investigate the Explorer. Dr. Dennis Guenther, professor of mechanical engineering at Ohio State University, is investigating Explorer safety, and he will submit his report to NHTSA when he's done. NHTSA said it's waiting for the report.
So we are not going to give NHTSA another push to work on an investigation because it's already going on.
Would it be an obstacle to reconciliation if Ford refuses to investigate the Explorer?
Well, I don't know right now. First, I just want to meet them because they have changed management. Once I meet with them, then we may talk further.
I think you said earlier that you would not reimburse Ford for tires that the auto maker already recalled on its own. Am I correct?
We are replacing recalled tires at our expense because we replace them with our own tires.
But if Ford replaced tires on its own before the government ordered a recall, they probably replaced them with non-Bridgestone tires. So I think it's illogical to cover costs associated with tires they replaced.
What if Ford argues that you should pay for some of the tires that Firestone would have had to recall under government edict?
I can't answer that right now, but I will discuss it with Ford.
Has Ford already contacted you to ask for repayment for some of the tires it already replaced?
No, it hasn't. The media reported something about how the two companies were in talks about a repayment of $3 billion or something, but it's not true.
Firestone's sales of replacement tires in the U.S. market in the first half slid 40 percent in value from a year earlier. How are the recent sales, and what's your outlook for the brand?
Sales have not been as bad as that recently. We're now trying to push the Bridgestone brand in the U.S. We are trying to expand Bridgestone into the mass market by adding new products next year.
Bridgestone is a premium brand in the U.S. If you shift to Bridgestones, how do you cover the mass market? How many new Bridgestones will you introduce?
Two or three kinds for the mass market.
Will that change the Bridgestone-to-Firestone sales ratio from the current 50-to-50?
I'm telling our people to let the market decide but, yes, it's possible that the mix will shift to up to 60 percent Bridgestones over the next year.
What are you doing to make Firestone quality match Bridgestone's?
We have set a worldwide standard for quality for all brands, and we have set up three teams from development, production and quality assurance to enforce it.
We have invested some ¥5 billion (or $41 million at current exchange rates) for the program in North America this year.
You showed a tire-pressure monitoring system at the Tokyo Motor Show in October. When do you plan to put it on the market, given that the U.S. government is moving to legislate the installation of such systems?
We're still developing the system, but we're aiming it at the replacement market after 2003. The success and likely price of this kind of a system depends on how much we can miniaturize it.
What's a primary feature of your system?
Our product is smaller and lighter than others.
Are you planning to cut costs more after you shut down the Decatur, Ill., plant, in December?
We already are cutting employees as we wind down the Decatur plant. And we had been laying off some people at our plants in Tennessee and Oklahoma, but we are now calling some people back at those plants. So we don't have any more plans to cut more people.