Profits at Bridgestone surge on solid sales

TOKYO (AP) — Tiremaker Bridgestone Corp. said Friday its profit nearly doubled in 2003 as sales rose in Europe and payments related to a massive U.S. tire recall three years ago declined.

But the tire company forecast lower profits for this year, citing higher rubber prices and increasing marketing expenses in Japan in the face of weak demand.

It also said its board of directors had approved the appointment of Mark Emkes as chief executive of Nashville, Tenn.-based Bridgestone Americas Holdings, replaced John Lampe, who is retiring in March.

The change is subject to approval at a March 30 shareholders meeting. Emkes, who has experience in Brazil and Mexico, is now executive vice president of Bridgestone Americas Holding.

Tokyo-based Bridgestone reported its group net profit climbed to 88.7 billion yen ($825 million) for the year ended Dec. 31, up from 45.3 billion yen the previous year.

Sales rose 2 percent to 2.30 trillion yen ($21 billion) from 2.25 trillion yen in 2002.

Bridgestone’s earnings had been hammered by a tire recall in August 2000 at its Nashville subsidiary, then called Bridgestone/Firestone. Payments linked to the recall, including legal settlements, totaled 11 billion yen ($102 million) in fiscal 2003, down sharply from 30.7 billion yen the previous year.

Bridgestone’s U.S. subsidiary recalled 6.5 million tires sold under the Firestone and other brands after the U.S. National Highway Traffic Safety Administration began investigating tires suspected in hundreds of deaths and injuries. The company later recalled an additional 3.5 million tires.

Sales in the United States last year edged down 1 percent as the plunging dollar eroded the value in yen of the U.S. results. But sales were up elsewhere — 2 percent in Japan, 20 percent in Europe and 21 percent in other regions.

In North America, the strategy of shifting to more expensive products as well as strong sales of auto parts offset the adverse effect of the rising cost of raw materials and other costs, it said. Sales were strong in truck and bus tires, car and light truck tires and Bridgestone-brand replacement tires.

To fight the problem of escalating costs for rubber and other raw materials, Bridgestone worked hard to stay competitive with new products such as large-sized tires and high-performance tires, the company said in a statement.

A fire at the company’s Tochigi plant in Japan crimped supply and bit into profits here, but Friday’s results were better than the forecast the company gave in September.

For this year, Bridgestone forecast a 15 percent decline in profit to 75 billion yen ($698 million) on virtually flat sales.

Bridgestone said the continuing rise in rubber prices will likely offset the positive impact from economic upturns in Asia and the United States. In Japan, the company will need to beef up marketing to counter the weak demand for replacement tires, it said.

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