Bridgestone Corp. is reorganizing its corporate structure along regional business unit lines and has set a financial target of 6-percent return on assets (ROA) for the next decade.
At the same time, Bridgestone executives indicated the company would boost its annual capital spending nearly 25 percent over its fiscal 2005 spending rate to more than $2 billion, or better than 8 percent of sales.
Bridgestone will revamp its operations around eight business units-six regional businesses, a special tire business and a diversified products business-the company said in a mid-term management philosophy briefing.
Management reiterated its commitment to a vertically integrated structure, from raw materials through manufacturing to retail sales and service.
``Bridgestone is advancing efforts on leveraging development and production asset of the raw material fields, developing and manufacturing production equipment and maximizing the retail network-all areas that Bridgestone commands a significant competitive advantages,'' the company said in a prepared statement.
Among specific actions management outlined to strengthen the firm's ``business domain'' are increasing added value through work on run-flat and high-performance car tires, low-profile and wide-base truck tires, and radial tires for off-the-road, aircraft and motorcycle applications.
In line with the regional business unit strategy, Bridgestone recently established units in Singapore and Dubai to cover the Asia-Pacific and Middle East/Africa regions. These are in addition to existing business units in Japan, China, Europe and the Americas.
While the firm's long-term ROA goal is 6 percent, the company said shorter term it is targeting a 5-percent ROA by 2010 and more than 5 percent by 2011.
In terms of capital spending, Bridgestone said it will invest in reconfiguring its operations to support strategic products such as ultra-high-performance, run-flat, off-the-road and other tire types. The tire maker also said it will expand capacity and develop assets in raw material fields.