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Bridgestone closed the Firestone deal in March 1998, beating out its European rivals. The makeup of the global tire industry would never be the same, as one by one competitors followed with their own acquisitions and mergers.
’13 Cadillac ATS fitted with Bridgestone Potenza runflat tires.
The bleeding finally stopped in 1993, and over the next six years, despite a major labor dispute in the U.S., annual earnings averaged $129 million, rising to $278 million in 1999.
Steven Usher, a respected Tokyo analyst warned that “by running up the price of the acquisition, Michelin and Pirelli bought themselves time while slowing down Bridgestone’s capacity to revamp Firestone’s plants.”
Toward the end of the decade, the U.S. National Highway Traffic Safety Admin. began to take note of the high incidence of serious accidents and upwards of 100 fatalities due to tire failures mostly involvingExplorer and Mercury Mountaineer SUVs.
In May 2000, the watchdog agency contactedand Firestone regarding its concerns. By summer, Bridgestone/Firestone would recall 6.5 million tires and the following May, after nearly a year of finger-pointing and recriminations, the longtime partners would end their century-old business ties.
Bridgestone refused to disclose its losses from the recall. However, management set aside $.8 billion in contingency funds in fiscal 2000 and fiscal 2001.
A decade after the recall, Bridgestone ranks as the world’s No.1 tire manufacturer with an estimated 15% global share, down slightly along with other traditional brands due to the emergence of new manufacturers, particularly in China and India.
Bridgestone also stands as Japan’s most-profitable automotive supplier, having passedin fiscal 2011. When the tire maker announces its fiscal 2012 results on Feb. 18, management expects operating income and margins to reach a record ¥287 billion ($3.2 billion) and 9.2%, respectively.
Bridgestone has achieved these levels in the face of a record-strong yen in fiscal 2012.
By the end of the current fiscal year, the company will operate 51 tire plants including three new facilities under construction in Thailand, Vietnam and the U.S. Bridgestone’s newest factory, in Pune, India, came on stream in January. Production outside Japan will approach 75%, up from an estimated 20% in fiscal 1987.
The company still operates 10 plants in Japan, including the mother Kyushu plant. Counting industrial and diversified products, Bridgestone operates 179 plants globally.
Under Bridgestone’s midterm business plan, management aims to achieve a 10% operating profit margin and 5% growth in yearly sales between fiscal 2013 and fiscal 2017, slightly ahead of the industry’s projected pace of 3%.