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Bridgestone Endures Growing Pains

September 3, 2000

TOKYO (AP) _ Back in the 1930s, when Shojiro Ishibashi translated his surname’s Japanese characters to name the tiremaker he founded ``Bridgestone,″ he definitely had international glory on his mind.

Business lately has been anything but glorious for the now-global company, shaken by a recall of 6.5 million tires by U.S. subsidiary Bridgestone/Firestone, an investigation by American federal authorities of the tires in 88 traffic deaths, a similar probe in Venezuela and the prospect of costly lawsuits.

Bridgestone Corp. has already taken a $350 million loss for the recall of the tires, sold as standard equipment on Ford Motor Co.’s Explorer sport utility and other vehicles. Company officials acknowledge they have yet to figure out the magnitude of the toll, such as falling sales and possible legal settlements.

Bridgestone’s problems are a telling story about the growing pains Japanese companies suffer as they strive to become global players.

Protected from competition by the government for decades, Japanese companies have long been notorious for slow, bureaucratic decision-making and public-relations stumbles.

They are also unaccustomed to aggressive consumers. Lawsuits are frowned upon in this harmony-loving society and often drag on for years.

The idea of crisis management remains such a novelty a basic manual on public relations after an accident, scandal or other crisis is being snatched up at the Tokyo Chamber of Commerce, selling 26,000 copies since its publication in July.

From the start of the tire recall, Bridgestone’s reticence struck a contrast with the quickness of Ford, which immediately made executives available to reporters and undertook a national newspaper ad campaign.

Ford CEO Jac Nasser made a special effort to be visible, trying to assure people that Ford was being open and taking action. Bridgestone was perceived as less forthright.

``The Tokyo headquarters of Bridgestone has almost no ability for risk management,″ said Tsunemi Tachibana, an analyst with Nikko Salomon Smith Barney.

If anything, response to the recall might have been even slower if the parent company hadn’t left day-to-day decisions with the subsidiary, Tachibana said.

Bridgestone officials here appeared somewhat baffled by the sudden media attention. President Yoichiro Kaizaki didn’t even appear at the Aug. 10 news conference in Tokyo, leaving the fielding of questions to Tadakazu Harada, vice president of international operations.

Instead of rushing to give a clear explanation, Harada stressed the operations of the U.S. subsidiary were separate from those in Japan.

Bridgestone also issued a brief statement to the media, calling the recall ``truly regrettable,″ and promising ``utmost support″ for Bridgestone/Firestone so it would be able to make safe tires.

Bridgestone has drawn criticism at home as well.

``Response slows, backlash grows,″ said a headline Friday in the Asahi national newspaper. ``Japanese management has much to learn from the tire recall in the United States,″ leading business daily Nihon Keizai Shimbun said.

The tire recall comes in the wake of two other major scandals highlighting shoddy Japanese management _ food-poisoning at a top dairy-maker and a massive cover-up of auto defects at Mitsubishi Motors Corp.

Still, Bridgestone’s corporate image is unlikely to take too much of a beating at home because the recalled tires were on about 1,100 Explorers sold in Japan, and there have been no reports of accidents, analysts say.

Bridgestone founder Ishibashi _ whose name means ``stone-bridge″ _ yearned to cultivate a progressive image. Bridgestone runs two museums with artworks by the European Impressionists, much of it personally collected by Ishibashi, who died in 1976.

He also dreamed of winning customers worldwide. Since its founding in 1931, Bridgestone set up shop in Europe, Latin America, the Middle East, elsewhere in Asia, as well as the United States.

Bridgestone has been shipping tires to the United States to make up for the recall, even chartering jets, and has boosted production at Japanese plants by 650,000 tires.

But Bridgestone is merely dealing with the problems at hand, instead of exploring the root causes _ a typical weakness of Japan’s crisis management, said Tomohiro Takanashi of Japan Research Institute, a Tokyo think-tank.

``Japanese companies have excelled at coming up with good products, but they have yet to learn the frameworks of global management,″ he said.


On the net:

Bridgestone Corp.: http://www2.bridgestone.co.jp/hqe/index.html

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