Firestone: We Won’t Go Bankrupt
TOKYO (AP) _ Bridgestone Corp.’s president said Tuesday its U.S. subsidiary, Bridgestone/Firestone, would not go bankrupt despite massive recalls and damage claims involving accidents in which Firestone tires are under investigation.
Bridgestone/Firestone is ``not in a state of insolvency,″ company president Yoichiro Kaizaki told a news conference. ``Our company hasn’t changed its intention to support Firestone.″
Nashville-based Bridgestone/Firestone recalled 6.5 million ATX, ATXII and Wilderness AT tires in August because of problems with tread separation cited in crashes, mostly on Ford Explorers.
U.S. regulators say Firestone tires are under investigation in at least 119 deaths in the United States.
The U.S. National Highway Traffic Safety Administration issued a consumer advisory on an additional 1.4 million tires. Bridgestone/Firestone agreed to also replace those tires at no cost for customers who ask.
The company has replaced 5 million tires in the United States, about 77 percent of those subject to the recall.
The news conference followed published reports that lawyers suing Bridgestone/Firestone fear the U.S. business might seek protection from creditors under bankruptcy laws as a potential $50 billion in damage claims pile up against it.
Kaizaki said Bridgestone will book a group special loss of $900 million in the fiscal year ending Dec. 31 because of costs related to lawsuits and tire recalls.
About half of the amount has been already spent for recalls, and the remaining half will cover lawsuit costs, he said, stressing that the amount should be sufficient.
Last month, the company said sales of Firestone replacement tires for cars and light trucks fell about 40 percent in the United States in September and October following the recall compared to a year earlier.