Bridgestone/ Firestone said the reorganization is designed to take advantage of better financing rates and to focus more on its tire business.
However, legal analysts told news sources that the move may have been made to protect the tiremaker from millions of product-liability claims, including the recent recall involving several Firestone Wilderness AT tires that were original equipment on Ford F-150 light trucks and other SUVs.
“This is an increasingly common legal technique used by large corporations to shield itself from legal liability and make it difficult for people who may have been harmed to collect any money at all,” Georgetown Law Center professor Heidi Li Feldman told Bloomberg. “The timing of this move makes it seem as if Firestone may be positioning itself to seek bankruptcy protection.”
According to company spokesperson Christine Karbowiak, three of the subsidiaries will be limited liability companies (LLC), which will allow them to maintain different financing rates.
“The LLC is similar to a corporation although it offers tax advantages for a family of companies such as ours,'' Karbowiak said. “The LLC provides no more enhanced protection from liability than a corporation.”
Four operating subsidiaries will report to Lampe: Bridgestone/Firestone North American Tire LLC, BFS Retail & Commercial Operations LLC (BFRC), BFS Diversified Products LLC and Bridgestone Metalpha USA Inc.
BFRC will consist of the Bridgestone/Firestone family of company-owned consumer and commercial store chains in the United States and Canada, including Firestone Tire & Service Centers, TiresPlus, and GCR, as well as the company's credit card operations. Larry Magee is the CEO, chairman & president of BFRC, which has headquarters in Bloomingdale, IL.
