TIRE INDUSTRY Firestone brand starts rolling once more

The brand took a hit after being blamed in fatal SUV rollovers.
CHICAGO TRIBUNE
CHICAGO -- Firestone, a brand that many pronounced dead three years ago, is poised to regain U.S. market share after suffering devastating losses to its sales and image related to deaths in Ford Explorers equipped with Firestone tires.
So says John Lampe, the chief executive who guided the company through the recall of 10 million Wilderness AT tires and will retire March 31.
"We are truly in much, much better shape than three years ago," Lampe said recently. "It would be silly to think that the damage from [the recall] has entirely passed, but we've made tremendous progress."
Firestone sales plunged 20 percent in 2001 in the wake of the recalls, stabilized in 2002 and grew 3 percent last year.
Bridgestone Americas Holding Inc., the American subsidiary of Japan-based Bridgestone Corp. that Lampe heads, lost $1.7 billion in 2001 but posted an $83 million profit in 2002. It expects to report similar results Feb. 20.
SUV controversy
Lampe, 56, took over as chief executive of Bridgestone/Firestone American operations in 2000 when the Firestone brand was front-page news because some of its tires were cited in the rollovers of Ford Explorer sport-utility vehicles that caused 271 deaths.
Lampe apologized to families of the victims, visited hundreds of dealers to assure them the brand would recover and appeared in television commercials in his shirtsleeves, promising to "make it right" for customers.
"The first thing was to stop the bleeding. We were under attack from a number of directions," Lampe said. "It's very easy in a crisis to lose the confidence of your people, the people you work with, your customers and your dealers. When that happens, you're in big trouble."
As far as apologizing to families of victims, he said, "When you have an issue that involves people losing their lives, you have a responsibility to stand up and apologize for it. I wouldn't do it any different."
Analyst's view
Saul Ludwig, an analyst with McDonald Investments in Cleveland, credits Lampe with saving Firestone and added, "I see it being viable and moving toward its former levels, but I don't see it getting back to where it was in 1999."
Lampe made "gutsy calls" in closing the Decatur, Ill., plant where many of the recalled tires were made, Ludwig said. In 2001, Lampe fired Ford as a client after Ford announced it would replace more than 10 million Firestone tires on its own because it feared they were unsafe.
Lampe's predecessor, Masatoshi Ono, "just stonewalled on the recall by saying we don't have a problem. There was a perception that Firestone was making inferior tires, and perception is reality. Lampe did a great job to change that," Ludwig added.
Few executives can pull it off, one crisis-management expert said.
"A vast majority of executives in a crisis like this abandon ship and become pundits," said Eric Dezenhall, head of Dezenhall Resources, a Washington, D.C., crisis-management company.
"He recognized that the objective was to survive, not to look good," Dezenhall said. "He didn't just admit they did something wrong. He worked hard to defend the honor of the brand."
Letting time pass
However, Al Ries, an Atlanta marketing consultant, says time may have been a bigger factor than Lampe's tactics in saving Firestone, which started selling tires in 1900 and is one of the most-recognized automotive brands.
"Firestone suffered the most damage, but it is such a well-known brand, like Tylenol, that if you give it enough time it could come back," Ries said. "You don't change minds. As time goes by, people forget. With time, people may remember there was some problem, but that they fixed it."
Ries says the company would have been better served by waiting for the crisis to blow over before trying to rebuild Firestone's reputation or by focusing more on the Bridgestone brand.
Lampe responds that assuring customers Firestone would be around helped keep the 2,000 company-owned stores operating and retained the loyalty of Firestone's 8,000 independent dealers.
"You can focus so much on a crisis that you can lose sight of the business," he said.
Bridgestone brand
Though Firestone sales are picking up, Bridgestone, which escaped damaging publicity from the recalls, has surged to be the company's No. 1 brand in the United States.
In 2000, Firestone accounted for 70 percent of the original-equipment tires it sold to U.S. automakers and 40 percent of replacement tires. Today, Bridgestone, a higher-priced brand than Firestone, holds 70 percent of that business and 60 percent of replacement tires. The company does not disclose how many tires it ships annually.
Modern Tire Dealer, a trade publication, estimates that Firestone had 7.5 percent of the U.S. replacement tire market last year, down from 9.5 percent in 2000.