Bridgestone

Company Snapshot: 

Bridgestone Corporation is based in Tokyo, Japan. The largest subsidiary of Bridgestone is the Bridgestone Americas Holding Inc., which is based in Nashville, TN and includes Firestone. The company is most well known for the production of tires. Bridgestone/Firestone has been the focus of an international campaign related to labor and environmental problems on its rubber plantation in Liberia.

On February 12, 2008, Bridgestone announced that it would withdraw from the marine hose business after an internal investigation found that its hose division had made improper payments to foreign agents to secure sales. Bridgestone is under investigation by the U.S. Department of Justice, the European Commission and Japan's Fair Trade Commission.

Ownership status: 
Publicly traded
Number of employees worldwide: 
123,727
Chief executive officer: 
Shoshi Arakawa, Chairman of the Board, CEO and President
2008 Global Fortune 500 rank: 
276
Corporate accountability
Accountability overview: 

Since 1926, Bridgestone's subsidiary, Firestone, has operated a rubber plantation in Liberia which has been characterized by child labor, abuse of workers' rights and environmental damage. The company is the focus of an international campaign called the Stop Firestone campaign. As a result of its abuses in Liberia, Bridgestone was given the Public Eye Award for Worst Global Corporation in January 2007 opposite the World Economic Forum in Davos, Switzerland.

Labor: 

The widespread use of child labor has been reported on Firestone's rubber plantation in Liberia. One of the major causes of child labor is the high production quotas rubber tappers are expected to meet everyday or their low wages are halved. Workers must carry buckets weighing 70 pounds each on a stick on their back and are exposed to toxic pesticides, among many other hazards. Firestone is also currently refusing to recognize a newly and democratically elected union leadership after years of only negotiating with a so-called "yellow" or company union.

Due to its abuse of workers, the company has been the target of a lawsuit by the International Rights Advocates filed in 2005. In June 2007, the judge in Indianapolis ruled against Firestone's motion to dismiss the case and ruled that the case would move forward on child labor claims.

Bridgestone has generally had harmonious relations with its unions in Japan, but the story was different after it acquired U.S. tire maker Firestone in the late 1980s. The United Rubber Workers, seeking to reverse contract concessions it made in the early 1980s, clashed with the new Japanese owners, who were uncomfortable with aggressive unions.

In 1994 the Rubber Workers went out on strike, but the company took a hard line. After staying out ten months—during which the company hired replacement workers—the union offered unconditionally to return to work without a contract. Bridgestone initially refused to take back the strikers, but it eventually did so while also retaining many of the scabs. The union launched a corporate campaign against Bridgestone to put non-workplace pressure against the company. The conflict officially came to an end in late 1996, when union members approved a new contract. In 2001 the company shut down the plant in Decatur, Illinois whose workers were among the most militant during the period of conflict.

A 2002 report by two Princeton University economists concluded that labor strife at Bridgestone’s U.S. plants, especially the one in Decatur, contributed significantly to the production of defective tires in the 1990s.

In 2007 the union, now part of the United Steelworkers, negotiated a new three-year master contract with the company.

Bridgestone unions from around the world participate in a network formed through the International Federation of Chemical, Energy, Mine and General Workers’ Unions.

Environment and product safety: 

Firestone has been accused of dumping toxic chemicals directly into the Farmington River in Liberia. The river is used by the local community for bathing and fishing and the pollution has caused health problems both for the population on the plantation as well as the aquatic life. Firestone's most recent Environmental Management Plan for their rubber plantation was rejected by the Liberia Environmental Protection Agency.

Social responsibility: 

Housing for workers on the Firestone rubber plantation in Liberia lack running water, electricity and indoor latrines, despite the fact that managers live in large homes with all of these amenities as well as access to golf courses. While Firestone has just recently begun to update some homes which were built in 1926, the new houses are still lacking in these basic amenities and are only located along the major road in the plantation.

Location(s)

Bridgestone Americas Holding, Inc.
535 Marriott Drive.
Nashville, TN, 37214
United States
See map: Google Maps
History
Financial information
Stock ticker symbol: 
TYO: 5108
Specialized Information
More detailed market share/concentration data: 

Bridgestone has identified the OE market as an important marketing tool in initiating cradle-to-grave relationships with customers. Bridgestone branded tires hold a 16.7% share of the OE consumer tire market. This accounts for OE sales to DaimlerChrysler (10% share), GM (27%), BMW (25%), Honda (21%), Isuzu (94%), Mitsubishi (28%), Nissan (9%), Subaru (75%), and Toyota (27%). Firestone, by contrast, holds a much smaller portion of the OE market- just 3%. Firestone tires are found on GM, Honda, Mitsubishi, Nissan, and Toyota vehicles. The company also maintains a strong presence in the much more profitable replacement passenger/light truck market; Firestone and Bridgestone hold 7.5% and 7% market shares respectively. (source: Modern Tire Dealer)

In the North American truck/bus tire market, Bridgestone is far and away the industry leader. According to the company’s 2005 annual report, the company holds a 60% market share in the North American truck/bus replacement market. In 2005 Bridgestone did, however, see some pretty serious supply glitches as it started to phase out the Dayton brand (consistent with Bridgestone’s overall marketing plan). In the face of shortages the company continued to supply its OE customers and ‘strategic’ replacement customers while leaving smaller dealers with the brunt of the shortages.

More detailed description of business strategy: 

Over the next three years Bridgestone Corp. is planning to spend $5.2 billion for capital investments to help assert its “undisputed leadership in the global tire industry.” For the North American market, the company is projecting 10 percent sales growth in both passenger/light truck and truck/bus tire segments. This will also be marked by an increase in ultra-high-performance tire sales, as a percentage of the total replacement product mix.

To supply the North American market Bridgestone reportedly plans on sourcing more tires from Latin America. To meet the demand the company is investing millions in existing plants in Brazil as well as a new, $220 million high performance tire facility in Monterry, Mexico.

Although Bridgestone manufactures a myriad of different products, the meat of Bridgestone’s revenue worldwide is in its tire sales; in 2005 tire sales accounted for just under 80% of the company’s sales. Geographically, the Americas are Bridgestone’s largest market, accounting for 42% of global sales, but Japan is not far behind with just under a third of global sales.

In the aftermath of the Firestone/Ford Explorer rollover debacle Bridgestone announced plans to restructure the company’s two main brands in an effort to rebuild the Firestone name and to reinforce the Bridgestone name. The company has been taking steps to reposition Firestone brand to target and appeal to what the company calls “value seekers” who are more “store reliant” than brand conscious. At last year’s SEMA show, a company representative told Modern Tire Dealer that Firestone will be marketed to “drivers who value substance over hype .”

The Bridgestone brand will continue to be the company’s higher end tire but the company plans on expanding that brand to include some low end buyers who still want the Bridgestone name (source: Tokyo Motor Show- International Automotive Analysts Conference, 2003). In November of 2006, the company unveiled the new Bridgestone tag line: “It’s Bridgestone or Nothing.”

AttachmentSize
Firestone Complaint2.46 MB
UN Report on Human Rights in Liberia's Rubber Plantations1.4 MB