TOKYO – Bridgestone/Firestone will no longer sell tires to Ford Motor Co. because the automaker tried to blame accidents under federal investigation on the tires, the president of Bridgestone Corp. said Tuesday.
The decision will pit Bridgestone against Ford in the automaker's possible recall of an additional 10 million Firestone tires, President Shigeo Watanabe told reporters at company headquarters in Tokyo.
Last summer, Bridgestone/Firestone — the U.S. subsidiary of Bridgestone Corp. — recalled 6.5 million Firestone tires. The National Highway Traffic Safety Administration is investigating the tires in more than 6,000 reported accidents including blowouts and tread separations. Most of the tires were on Ford Explorer sport utility vehicles.
Bridgestone's assertion was that some combination of the tires and vehicles may be the cause of the reported accidents, said Watanabe, who took office after his predecessor resigned over the tire recall.
On Monday, Bridgestone/Firestone said it won't sell to Ford in North and South America, ending a nearly century-old relationship that had soured because of last summer's recall.
Watanabe said he gave John Lampe, Bridgestone/Firestone chief executive, several options in dealing with Ford, and "the worst possible scenario" was ending the relationship. Ford, however, consistently refused to change its view that the tires were to blame, he said.
"To be told they are defective is hard to take," Watanabe said of the tires being proposed for additional recall. "We view tires and vehicles as one system."
Both companies face hundreds of lawsuits over the accidents.
While he said that sales of the Firestone brand have plunged to about half of last year's level since the recall, Watanabe said the decision to terminate its agreement with Ford won't hurt its overall bottom line.
Business with Ford makes up only 2 percent of Bridgestone's global group sales, he said. Bridgestone sales totaled 2 trillion yen ($16 billion) last year. Lampe said that Firestone's business with Ford totaled about 5 percent of its revenue.
Watanabe said the figures were small because much of Bridgestone's business was with car owners who buy tires rather than with automakers.
Moody's Investors Service placed under review for possible downgrade the ratings on debt of Bridgestone Corp. and Bridgestone/Firestone. A lower rating could drive up the company's costs of borrowing.
The U.S. credit rating agency said that it will assess how the decision to terminate the relationship with Ford will affect the company's overall business and profits and how Firestone copes with the possible damage.
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