Bridgestone Firestone Inc Essay Research Paper

Bridgestone / Firestone, Inc. Essay, Research Paper

Company Overview

Bridgestone/Firestone, Inc., a subsidiary of Bridgestone Corporation, was formed in 1990 when Bridgestone U.S.A. merged with The Firestone Tire & Rubber Company. In addition to manufacturing tires, Bridgestone/Firestone produces a variety of products including air springs, building materials, synthetic and natural rubber, and industrial fibers and textiles. The Nashville, Tennessee-based company has over 38 QS9000/ISO9000 Certified production facilities throughout the Americas, along with numerous international facilities throughout the world.

Firestone’s company philosophy is derived from a blend of Japanese and Americans methods, with a focus on providing quality products. In the words of the former leaders of Bridgestone and Firestone, Bridgestone/Firestone strives to “Serve Society with Products of Superior Quality” and to be the “Best Today . Still Better Tomorrow.”

Bridgestone/Firestone is best known for it’s production of tires (more than 8,000 different types and sizes), which account for more than 75 percent of its annual revenues. As a leader in world tire technology, Firestone utilizes research and development centers in three countries and testing centers around the world to help develop, manufacture and market tires for almost every kind of vehicle. (Bridgestone/Firestone Profile)

Strengths

Bridgestone/Firestone finds much of its strength in having “one of the richest tire makers in the world as its parent” (Chappell, 09/11/00). Bridgestone Corporation has been around since 1931 and has established itself as a well-known international manufacturer of tires, rubber products, automotive products, chemical products, sporting goods, and other products (Bridgestone Annual Report, 1999). The resources and prestige of having Bridgestone as a parent gives Firestone an extra edge in the market.

One of Firestone’s biggest strengths is the fact that Firestone’s passenger vehicle trade is not the critical part of Bridgestone Corp’s world profit picture. Roughly 60% of Bridgestone’s North American profits came from the sale of heavy-duty truck tires. Firestone has a 16% share of that market, and the Bridgestone brand holds another 6.5 percent share.

Another strength for Firestone is its well-established brand name. According to an Automotive News reporter, the Firestone brand is “positioned in such a way that even a major decline in its original-equipment automotive business would not necessarily sink it” (Chappell, 09/11/00). This fact is essential to the survival of the company should the Firestone tire business disappear as a result of the current recall fiasco.

Bridgestone/Firestone has also signed a new deal with Honda of America Manufacturing Inc. Firestone has previously supplied approximately 75 percent of the tires to be put on the Honda Civics manufactured in Ohio and Alliston, Ontario. Dunlop Tire Corporation supplied the other 25 percent. The new deal will equip all new Civics from those plants with Firestone tires. Not only does this add to Bridgestone/Firestone’s revenues, but it also shows that Honda has confidence in Firestone’s ability to produce quality tires (Chappell, 09/15/00).

Bridgestone/Firestone also has a deal with Saturn Corporation to equip every Saturn with Firestone tires. Some Saturn dealers say that customers have asked about the recall but that customers have not stopped buying them because of the recall. A spokeswoman for Saturn says that they are not even considering choosing a different supplier. This, along with the Honda deal and a strong commitment to Toyota helps Bridgestone/Firestone’s image in that it shows that Firestone’s non-Ford customers have faith in the Firestone brand (Chappell, 09/11/00).

Another important strength for Bridgestone/Firestone is the fact that they have survived another big recall in the past. In 1978, the National Highway Traffic Safety Admininstration forced the company, then know as Firestone Tire and Rubber Co., to recall nearly 13 million tires. That recall involved the Firestone 500-series radial passenger car tires. The 1978 recall “remains the single largest product-safety action in automotive history” (Hess, 09/16/00). There are many similarities between the current recall and the 1978 recall. Both involved long strips of tread separating from the tires, apparently a result of a breakdown of the adhesion among the layers of the tires. Until the recent problems began at Bridgestone/Firestone, Firestone tires were among the top selling tires.

Problems/Weaknesses

Problems at Bridgestone/Firestone have recently become some of the top news headlines. The three most pertinent areas of controversy include labor relations and plant safety, production problems, and the current tire recall.

Threats of a union strike back in September brought to light issues involving poor labor relations at Bridgestone/Firestone. According to observers, there has been a “long history of labor trouble at the company – and in the tire industry in general” (Wilson, 09/04/00). The United Steelworkers of America had threatened to strike at nine of the Bridgestone/Firestone plants if an agreement could not be reach by September 1, 2000. Allegations have been made that faulty tires were made at a plant that was using replacement workers. On Septe