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Bridgestone boss quits
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January 11, 2001: 1:43 p.m. ET
CEO of troubled tiremaker is second top exec to leave since Firestone recall
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NEW YORK (CNNfn) - Troubled tiremaker Bridgestone said Thursday its Chief Executive Yoichiro Kaizaki would step down, as losses stemming from a huge tire recall mount.
The company's, whose Firestone-brand tires have been linked to hundreds of deaths in the United States and South America, said Kaizaki was retiring and would be replaced by senior managing director Shigeo Watanabe. Kaizaki will become a full-time adviser to the company.
 The firm did not say whether Kaizaki's departure was related to the scandal, which has led to the recall of 6.5 million tires at a likely cost of a billion dollars, in addition to the lost sales and legal liability.
While analysts expect little change in company policy with the change at the top, they said Watanabe -- who is currently in charge of tire development, manufacturing and quality assurance -- will be able to solve the technical problems that have plagued the U.S. operations.
"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," said Howard Smith, an auto analyst at ING Baring Securities in Tokyo.
Some analysts looked upon Kaizaki's resignation favorably, including Seiji Sugiura, auto analyst at Nomura Securities.
"It's probably a sign that the company's near some sort of closure on the recall," he said.
Bridgestone execs criticized for response
Bridgestone has generally been given poor marks for responding slowly to the mounting reports of tread separation, tire failures and accident claims as they mounted. Ford Motor Co., the automaker which had the overwhelming majority of the recalled tires on its vehicles, finally demanded Bridgestone/Firestone's warranty information and did the analysis that led to the recall.
While Bridgestone/Firestone officials believe that the design of the Ford Explorer, the vehicle with most of the recalled tires, contributed to the problems, they have also acknowledged there were design flaws and problems with the manufacturing process at one of its plants that led to the tire failures.
Bridgestone officials were slower than Ford executives to mount a public-relations campaign around the crisis. While Ford CEO Jac Nasser appeared on commercials almost immediately pledging to do everything possible to help customers, the Japanese executives running the tiremaker were largely unseen by the U.S. public.
Kaizaki will step down after a shareholder meeting in March. The move is the second top-level Bridgestone executive to go since the recall. Bridgestone replaced Bridgestone/Firestone CEO Masatoshi Ono with U.S. executive John Lampe in October.
Once the recall was announced, Bridgestone chartered cargo jets to airlift tires from its Asian plants to help provide replacement tires. The recall was essentially completed in just over four months, about a third of the time of original estimates.
Shareholders hit by recall
Still, while Kaizaki's handling of the recall was praiseworthy, his approach to the public relations crisis sparked by the recall had been disappointing, said Christopher Redl, an analyst at UBS Warburg.
"Investors were gradually becoming angry with how he was handling the crisis," Redl said.
Bridgestone shares rose 0.7 percent to ¥980 in Tokyo Thursday. Kaizaki's decision to step down -- although he will remain as a consultant to the company -- was announced after the market closed.
In recent weeks the stock has hovered near a nine-year low, after bottoming at ¥938 in October, having shed more than 50 percent of its value since the recall.
"The most important issue for the Bridgestone group right now is restoration of our brand and regaining trust," Watanabe told a news conference.
Bridgestone booked a $750 million one-time loss last year to cover the cost of the recall and potential payments to litigants, resulting in a sharp drop in consolidated net profit to an estimated ¥13 billion ($111.3 million) from the prior year's ¥88.69 billion.
The recall also cost Ford (F: Research, Estimates), the world's second-largest automaker behind General Motors Corp. (GM: Research, Estimates), about $500 million, not including legal liability or lost sales of its best-selling Explorer.
-- from staff and wire reports 
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