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American Morning

Bridgestone/Firestone Says Cancellation of Ford Relationship Necessary

Aired May 22, 2001 - 09:32   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Ford today is expected to call for what is being described as an expanded replacement program for Firestone tires on Ford Explorers. It could involve as many as 10 to 13 million tires not involved in an earlier recall. Firestone says Ford is trying to use the tire-maker as a scapegoat. Yesterday, Firestone announced that it was ending its nearly 100-year relationship with Ford.

Firestone's parent company in Japan says it regrets the end of the century-long relationship with Ford, but Bridgestone corporation says the company had no choice.

CNN Tokyo bureau chief Marina Kamimura has the latest.

(BEGIN VIDEOTAPE)

MARINA KAMIMURA, CNN CORRESPONDENT (voice-over): Bridgestone's Shigeo Watanabe stood by his man in the U.S., saying that while it was the last option that Firestone's Japanese parent wanted pursued, that the company had given the head of their U.S. arm full rein to do whatever necessary to address damaged ties with Ford, including pulling the plug on the relationship.

SHIGEO WATANABE, PRESIDENT, BRIDGESTONE (through translator): Why did we reach this conclusion now? There are reports going on over Ford's concern over a new and massive number of the tire recall. We have been insisting that a joint investigation be conducted. However, Ford simply is not willing to do that.

KAMIMURA: While Watanabe left open the option of renewing ties should Ford change its stance, the blame game over the deadly accidents otherwise continued.

WATANABE (through translator): Ford does not change their views that safety concerns over the vehicle fell solely on the problems of the tires.

KAMIMURA: Bridgestone's president said that while the company had not heard directly from Ford about a reported intention to expand the Firestone recall, he said if it happened, Bridgestone would not cooperate. Watanabe said that a recall of up to a rumored 16 million tires could threaten his subsidiary's very existence. As they have been saying throughout this ordeal, analysts in Japan say that the damage to a profitable Bridgestone from this break- up is still relatively minimal. Ford sales in North and South America account for a mere 1 percent of Bridgestone's overall sales. Business worldwide with Ford, just 3 or 4 percent.

But observers did not rule out repercussions with other auto- makers, wary about U.S. consumer sentiment. In Japan, at least, where the Firestone association with Bridgestone is largely nonexistent, analysts say Bridgestone's relationships with car giants like Toyota remains solid.

But while there may not be a big impact on Bridgestone's profits yet, analysts say the ramifications of this fallout could be big for other reasons. With the gloves now off between Ford and Bridgestone/Firestone, a new negative must be weighed in: the high potential for a lawsuit battle between the two companies.

Marina Kamimura, CNN, Tokyo.

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