Chairman, president, and chief executive officer, Bridgestone Corporation
Born: ca. 1943.
Career: Bridgestone Corporation, 1965–1983, various positions; Bridgestone/Firestone, 1983–1988, technical advisor; Bridgestone/Firestone Europe, 1988–2001, various positions; Bridgestone Corporation, 2001–, chairman, president, and chief executive officer.
Address: Bridgestone Corporation, 10-1, Kyobashi 1-chome, Chuo-ku, Tokyo, 104-8340, Japan; http://www.bridgestone.co.jp/english/info.
■ Shigeo Watanabe was thrust into the leadership position at Bridgestone Corporation in March 2001 following the resignation of his predecessor, Yoichiro Kaizaki, on the heels of Bridgestone/Firestone's massive recalled of 6.5 million tires in the United States in 2000. The recalls were due to defects the U.S. government said led to rollover accidents in Ford Explorer sport-utility vehicles (SUVs). One hundred and forty-eight people died as a result of the accidents. In a departure from their usual practice of choosing a person with generalized experience, Bridgestone executives elected Watanabe—a senior managing director and long-time technical and quality-control advisor with Bridgestone/Firestone—to lead their company through the crisis and a critical period in its history. Analysts speculated that Watanabe was chosen for his special expertise, which, they said, the corporation sorely needed to address technical difficulties experienced by its U.S. operations and to rebuild confidence in that operation. Under Watanabe's steady and focused leadership, Bridgestone Americas made a dramatic return to profitability in 2002.
Bridgestone Corporation was established in 1931 and by the early 21st century had become the world's largest manufacturer
of tires for trucks, buses, cars, and motorcycles. It sup plied tires to almost all major automobile manufacturers, for aircraft and off-road mining vehicles, and became racing's Formula One tire supplier after Goodyear withdrew in 1998. Its diverse line of products included industrial-rubber components, building materials, and recreational products. In 2003 the corporation operated more than 100 plants in 24 countries, employed more than 108,000 people, had close to $22 million in sales, and showed a net income of $828 million.
The alliance between Firestone and Ford began with the founders of the two companies, Harvey Firestone and Henry Ford. Since then, Firestone provided tires for Ford vehicles, including Ford's Explorer. In early August 2000 reports began linking Firestone tires with the unprecedented number of rollover accidents involving Explorers. The death toll from those accidents would reach 148. Ford was quick to place full blame on the Firestone tires. Bridgestone/Firestone eventually admitted that poor tire design and manufacturing at its Decatur, Illinois, plant was partially responsible for the accidents and, by the close of 2001, had settled court cases with more than six hundred plaintiffs and was continuing good-faith negotiations to settle others.
When the reports first began linking Firestone tires to the accidents, Bridgestone—under the leadership of Kaizaki—stonewalled the press and the public alike until a congressional hearing in the United States forced the company to respond. Kaizaki sent a representative in his place who could neither speak English nor adequately address questions regarding technical issues. Amid a barrage of bad press and serious damage to its American tire business, Bridgestone announced in January 2001 that three top executives, including Kaizaki, would resign. "It was a tacit admission of how badly Kaizaki and his team handled the crisis in the early days," wrote a reporter for the Los Angeles Times (bankrupt.com).
Following Watanabe's appointment, Bridgestone began addressing its part in the Explorer tragedies and to respond to Ford's swift and damaging finger-pointing. Bridgestone accused Ford of defective design in their 1996 and 2000 Explorer four-doors that resulted in understeering and oversteering problems. In an emergency, charged Bridgestone, these defects caused drivers to lose control of the vehicle. Bridgestone asked that the U.S. National Highway Traffic Safety Administration investigate the safety of the SUVs. Ford faced fierce litigation, settling much of it out of court. In May 2001 Ford recalled about 50,000 2002 Explorers and Mercury Mountaineers because of tires damaged during the assembly process. Watanabe commented: "We have been saying it's strange there are that many accidents with the Explorer. We are asserting what should be asserted, not picking a fight" ( ChannelCincinnati.com ).
In late May 2001, in what Watanabe called an "excruciating" decision, Bridgestone/Firestone ended its almost century-long alliance with Ford in the Americas following Ford's decision to replace a further 13 million Firestone tires ( CNN.com ). Watanabe said Ford's action left Bridgestone no other option but to sever the alliances. According to Bridgestone's 2001 annual report, Watanabe said the decision was made because "the relationship's foundation of mutual trust had eroded" (www.bridgestone.co.jp). He noted that he had personally discussed with Ford executives the issues that undermined the relationship. According to the CNN.com reporter, Japan's auto analyst for J. P. Morgan, Steve Usher, noted that Bridgestone did all it could to avoid the breakup, and he credited the company for finally taking a proactive role: "[Previously] they didn't feel it was as serious a problem [in Japan] as it was in the United States. They also took a more Japanese approach, which is not to flay your opponents…. The decision to sever the ties with Ford and take a more aggressive stance with regard to the allocation of blame is a very positive one."
Following Watanabe's appointment as Kaizaki's successor, the Los Angeles Times reporter quoted analyst Shigeharu Kimishima of Kokusai Securities as commenting: "Always hanging over Kaizaki's head was the question of accepting responsibility…. The change is needed and the company can now begin to rebuild its image" ( bankrupt.com ). Analysts believed that his appointment was a signal to shareholders and consumers alike that Bridgestone was taking charges against their product seriously. A reporter with CNNmoney quoted analyst Howard Smith of ING Baring Securities in Tokyo as commenting of Bridgestone's decision to place Watanabe in the top slot: "I'm presuming he will be a safe pair of hands, and they can use him to rebuild the brand and deal with the technical issues on the investigation in America" (money.cnn.com).
While his prior years of employment with Bridgestone remained relatively obscure to the general public, following his appointment as CEO, Watanabe's every action was heavily scrutinized in the press. Watanabe focused firmly on Bridgestone's future and his role in it. His first message as new leader was posted on Bridgestone's Web site. He said: "My 36-year career at Bridgestone and its subsidiaries has centered on product development and has included nine years in the United States and Europe. I will draw fully on my experience on the technological side of the tire business in working to reinforce and revitalize our brands." He stressed that the most immediate challenge for the corporation was to restore confidence in and revitalize Firestone, the achievement of which he openly admitted was absolutely necessary to Bridgestone's strategy. "So let this be my inaugural pledge as chief executive officer: We are committed to the Firestone brand and to Bridgestone/Firestone's North American operations. To fulfill our global vision, it is necessary to rebuild the value of those precious assets" (www.bridgetsone.co.jp).
Watanabe added that charges against their 2000 balance sheet for potential liabilities and other legal costs and the cost of replacing the 6.5 million recalled tires led to a decline in net earnings of 80 percent that "obscured an otherwise strong business performance worldwide." Having addressed the downside, he proceeded to build confidence in the corporation as an entirety by listing its strong performance in other subsidiaries and countries. "We are determined to translate our fundamental strengths into renewed growth in sales, earnings, and shareholder value," he said. He implemented a far more open approach and exchange of ideas among all sectors, regions, and individuals within the group and streamlined his board of directors by reducing it from 28 to 8 members. This, he asserted, would transform it into "a forum of meaningful, constructive debate" and enable much swifter responses to issues and opportunities. He also expressed his "great personal sadness" at the deaths and injuries sustained during the use of products manufactured at Bridgestone's subsidiaries, and he said that "Maximizing safety is manufacturers' most fundamental responsibility…. This is a time for redoubling efforts to ensure that all of our companies fulfill that responsibility, consistently, conscientiously, and completely."
In the 2001 annual report Watanabe outlined plans that encompassed three priorities: Rebuilding in the Americas, Reinforcing Confidence, and Defining a Vision. As to the first, he commented that Bridgestone/Firestone employees were working "hard and well" to restore profitability under the corporation's new "Making it Right" slogan. As evidence that the plan was working, he noted an upswing in demand for Firestone tires. As to the second priority, he said that while his predecessors shared "an unspoken understanding of common values," unspoken was insufficient. "We have spelled out our philosophy in words that everyone can understand. The core concepts are trust and pride: the trust that we earn from customers and from everyone in the community. And the pride that we feel in earning that trust." He stressed that safety and the customer were of primary importance, that that goal could only come from quality products, and that he personally would head up a program to promote quality improvements throughout the entire group. As to vision, he said that tires and new technologies would remain the company's core business, and he committed the company to more aggressive handling of intellectual property. "No longer will we let promising technologies lie fallow simply because they don't mesh with our in-house development programs."
Watanabe firmly believed in open communication to keep shareholders and stakeholders apprised and updated, and he held 10 press conferences in the first 12 months as CEO. In the Americas, he oversaw a sweeping restructuring aimed at regaining profitability. New companies were established to oversee all North American tire-manufacturing and wholesaling operations under a common holding company headed a by newly instated American CEO (replacing Masatoshi Ono) at Bridgestone/Firestone's Nashville, Tennessee, subsidiary.
In his 2002 annual report Watanabe stressed strategic, qualitative growth, stating that, while the company would continue to "pursue and attain" growth in the industry, part of that growth would be due to a greater emphasis on profitability. "In the past, we chased every kind of business with more or less equal fervor. Now, we are shaping our business portfolio more carefully in original equipment tires and in replacement tires" (www.bridgestone.co.jp). While principal focus would be on larger-sized, high-performance tires and the high-value niche for run-flat tires, commodity-grade tires would remain a large part of their worldwide business.
Following Watanabe's visit to Bridgestone's South American subsidiary, a reporter noted that Watanabe stressed the group's mission of "Serving Society with Superior Quality." He outlined the group's 10-year plan and reiterated and reinforced their global vision: "to have 140,000 employees focused on achieving trust and pride…. Through pride in the company's achievements, and each employee's personal contribution, Bridgestone earns the respect of stakeholders at every level, be they the families of employees, shareholders, suppliers or ultimately, our most precious partners, our customers," he commented (www.firestone.co.za).
Watanabe assured stakeholders in a message in the 2003 annual report that continuing emphasis would be placed on global brand-building in 2004 under the message "Passion for Excellence." He concluded: "Team members at all the Bridgestone Group companies are genuinely passionate about excellence—in products and services and in all of our activities. I invite you to watch us fulfill our slogan" (www.bridgestone.co.jp).
See also entry on Bridgestone Corporation in International Directory of Company Histories .
"Bridgestone: Announce Resignation of Three Top Executives," http://bankrupt.com/CAR_Public/010115.MBX .
"Bridgestone Annual Report 2001," http://www.bridgestone.co.jp/ir/ar/2001/02conts.html .
"Bridgestone Boss Quits: CEO of Troubled Tiremaker is Second Top Exec to Leave Since Firestone Recall," CNNmoney.com , http://money.cnn.com/2001/01/11/asia/bridgestone/index.htm .
"Bridgestone Faces Hefty Cost in Tire Spat," CNN.com , http://cnn.com.tr/2001/BUSINESS/asia/05/22/japan.bridgestone/#3 .
"Firestone Wants Ford Investigated: Tiremaker Claims Deaths Were Caused by Steering Problems," ChannelCincinnati.com , http://www.channelcincinnati.com/money/799823/detail.html .
"Product Strategy: Focusing on High-Value Segments, Annual Report 2002," http://www.bridgestone.co.jp/ir/ar/2002/product.html .
"To Our Stakeholders, Annual Report 2003," http://www.bridgestone.co.jp/ir/ar/2003/president.html .
"Trust and Pride—the BF Vision," http://www.firestone.co.za/news_article.asp?id=448 .
"A Word from the New President," company press release, http://www.bridgestone.co.jp/ir/ar/2000/02message.html .