Bridgestone ready to meet the challenges

June 1, 2006
Bridgestone Americas Holding sees major challenges ahead for tire suppliers and their trucking customers. We're seeing a huge impact from rising raw material and energy costs that aren't slowing, said Mark Emkes, chairman & CEO, at a meeting of Bridgestone dealers last month. We expect to spend an extra $360 million this year to cover higher raw material and energy prices, which is why we've had to

Bridgestone Americas Holding sees major challenges ahead for tire suppliers and their trucking customers. “We're seeing a huge impact from rising raw material and energy costs that aren't slowing,” said Mark Emkes, chairman & CEO, at a meeting of Bridgestone dealers last month.

“We expect to spend an extra $360 million this year to cover higher raw material and energy prices, which is why we've had to raise our tire prices,” he added. An 8% price increase last September was followed by a 5% hike in March, noted Singh Ahluwalia, president of Bridgestone Americas' truck & bus tire division.

Bridgestone plans to strengthen its “vertical integration” strategy in an effort to gain more control over the cost of raw materials. “We bought an Indonesian rubber plantation from one of our competitors last year and we're helping Liberian farmers…plant runner trees so they can grow a cash crop,” said Emkes.

Imports from overseas manufacturers are another challenge. “Some of our U.S. plants are not globally competitive and some are not profitable,” said Asahiko Nishiyama, president of Bridgestone Americas “We can't afford to ignore the realities of global competition and nor can the unions.”

To counter this threat, Bridgestone will invest $5.2-billion in its products and workforce over the next three years. “If we focus on developing a premium product and deliver value added services to our customers…that these competitors can't, then we'll able to sustain profitability,” Nishiyama added.
www.bridgestonetire.com

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