Mothra Vs. Godzilla:Bridgestone President Watanabe: No Ford: No Big Deal!
TOKYO -- Bridgestone Corp. President Shigeo Watanabe said the move by Bridgestone/Firestone to stop supplying tires in the Americas to the Ford Motor Co. will reduce Bridgestone's annual group sales by less than 2 percent. He added that the Nashville-based subsidiary currently generates around 3-4 percent of group sales from its supply of tires to Ford, down from 5 percent before tire recalls began in the United States last year.
"We see no major negative impact to our group-level sales due to the business termination with Ford," Watanabe said. "It does not mean we are terminating our business relationship with Mazda." He added, however, that the supply termination was "one of the worst scenarios we had."
Watanabe said the company decided to terminate its business relationship with Ford as the U.S. automaker had failed to cooperate in investigating the reasons for accidents blamed by Ford on Firestone tires. "We have been saying to Ford that accidents happened due to a combination of the vehicles and the tires," he said, adding that Ford refused to disclose to Bridgestone information related to problems with its Explorer model.
Watanabe said there have been up to 10 times more complaints about tires on Ford Explorer models than on other vehicles. "We notified Ford that we have some safety concerns related to its Explorer model," he said. "But, Ford did not admit that.
"If we keep recalling our tires, the existence of Bridgestone/Firestone will be in danger."
Watanabe said that, between January and April, Bridgestone/Firestone's business was in line with company expectations. "Sales of Bridgestone/Firestone were down almost half compared with a year earlier. But, sales are slightly better than scheduled," he said.
Shares in Bridgestone Corp. are skidding this morning on the Tokyo Stock Exchange, falling 5.6 percent in heavy trade to end the morning at ¥1,321 ($10.80).
"It's getting shot, it's getting hit quite a bit," said Paul Migliorato, senior international institutional salesman at Commerz Securities.
A total of 4.8 million Bridgestone Corp. shares had changed hands in under two hours of trade, the highest volume in the stock since May 7, he said.
Mizuho Investors Securities broker Masatoshi Sato said investors were closely watching how the news will develop. "There was not sufficient buying to absorb selling of Bridgestone stock by people discouraged by the news," he added.
Moody's Investors Service said it has placed under review for possible downgrade the Baa1 senior unsecured debt rating of Bridgestone Corp. and the Prime-2 short-term rating of Bridgestone/Firestone Inc.
It attributed the action to Bridgestone/Firestone's announcement yesterday and concern that this could hurt sales and profitability.