Bridgestone recovers from tire-recall debacle

[Jay!]

from The Japan Times; Aug. 10, 2002

Bridgestone recovers from tire-recall debacle

Bridgestone Corp. said Friday it posted a consolidated net profit of 24.48 billion yen in the January-June period, marking a turnaround from the 30.57 billion yen loss it logged a year earlier.
The automobile tire maker said it benefited from active marketing through wider sales networks, as well as from reduced costs and enhanced productivity and distribution.

The firm attributed the consolidated loss it posted in the January-June period of 2001 to costs associated with the tire recall scandal involving its U.S. unit, Bridgestone/Firestone Inc.

Bridgestone said its group pretax profit in the first half of 2002 grew 77.6 percent to 55.70 billion yen, mainly due to increased revenues generated by its U.S. operations.

Consolidated sales climbed 6.4 percent to 1.094 trillion yen, boosted by the weakness of the yen, the company said.

Bridgestone said it will pay an interim dividend of 8 yen per share, unchanged from the previous year. This dividend includes a special dividend of 2 yen.

For the full year to December, Bridgestone expects to generate a group net profit of 70 billion yen, a pretax profit of 135 billion yen and sales of 2.22 trillion yen.

On a parent-only basis, Bridgestone posted a net profit of 29.49 billion yen in the first half of 2002, compared with the 164.34 billion yen net loss it recorded the year before.

Its pretax profit came to 51.25 billion yen, up 5.7 percent, with sales at 343.36 billion yen, up 3.3 percent.

For the full year, the company projects an unconsolidated net profit of 62 billion yen and a pretax profit of 108 billion yen, on sales of 720 billion yen.


Big spending plans
Bridgestone Corp. said Friday it will spend 30 billion yen over the next two years to expand car tire production and reorganize its global manufacturing operations.
Bridgestone, Japan's biggest and the world's third-largest tire maker, said the expansion will increase annual production capacity at 12 of its 36 plants worldwide by 8 million tires, or about 5 percent.

The move is the first time Bridgestone has expanded production on a global basis.

The decision reflects growing demand for larger tires and high-performance versions in the United States, Europe and Japan, as well as a surge in demand for car tires in Asia, the Middle East and Africa, Bridgestone said.

If Bridgestone captures 20 percent of the global tire market with the expansion, it would share the top spot with rivals Goodyear Tire and Rubber Co. of the United States and French giant Michelin, which both have around a 20 percent share.

In Japan, Bridgestone will invest about 5 billion yen to increase the daily production capacity of large and high-performance car tires at six plants by a combined 5,000 units by the end of 2003.

Bridgestone said it will also invest 12 billion yen to boost the daily production capacity of conventional car tires at plants in China, Indonesia and Thailand by 16,000 to 60,000 tires by the end of 2004.

It will also invest 7 billion yen to raise the daily production capacity of large and high-performance car tires at a Polish plant by 5,000 units to 15,000 tires by the end of 2004.

In Latin America, Bridgestone will invest 6 billion yen at Costa Rican and Mexican plants to increase their production capacity by between 10,000 and 26,000 tires by the end of 2004, it said.