Bridgestone Profits Fall in 2001, Recovery Expected This Year

TOKYO AP reported that Bridgestone's profit fell 2 percent in 2001 but the company said Friday it expects earnings to more than triple this year.

Bridgestone's net earnings totaled 17.4 billion yen ($130 million) in 2001, down from 17.7 billion yen the previous year.

The decline was largely because of a 203 billion yen ($1.5 billion) extraordinary loss at its U.S. unit Bridgestone/Firestone for costs for tire recalls and litigation fees and for closing a plant in Decatur, Ill., the Tokyo-based parent company said Friday.

Operating income fell 40 percent to 74 billion yen ($552 million) as business in North America suffered from declining sales, the economic downturn and inventory adjustments, Bridgestone said.

Bridgestone said sales rose to 2.1 trillion yen ($15.7 billion) from 2 trillion yen the previous year, largely because of the weak yen. A weak yen helps exporters like Bridgestone by raising the value of its overseas earnings.

Both the earnings and sales figures were roughly in line with what Bridgestone gave as its outlook a few months ago.

Chief Executive Shigeo Watanabe said recovery was in sight since no extraordinary losses were expected the current year. He said 600 lawsuits related to the recalled tires blamed for fatal accidents have been settled, although he refused to say how many cases were still pending.

``We foresee a turnaround in our North American business,'' Watanabe told reporters.

For 2002, Bridgestone profits are expected to more than triple to 65 billion yen ($485 million) as sales rise to 2.2 trillion yen ($16 billion), it said.

The projections are mainly based on prospects for stronger sales in the United States as new Bridgestone-brand products get introduced and retail channels are expanded.

In August 2000, Nashville, Tenn.-based Bridgestone/Firestone launched a recall of 6.5 million tires after the U.S. National Highway Traffic Safety Administration began investigating tires suspected in hundreds of deaths and injuries.

Last May, Ford began a $3 billion program to replace 13 million additional tires.

Bridgestone/Firestone had initially refused to expand the recall but agreed in October to a recall of 3.5 million more tires that was ordered by NHTSA.

The tire maker's relations with Ford Motor Co. that had spanned a century unraveled over the tire recalls.

Ford blamed the tires, while Bridgestone insisted some combination of the tires and the vehicles were behind the accidents, which mostly involved Ford Explorer sport utility vehicles.

Watanabe said talks with Ford were continuing, but it was still uncertain whether the relationship could be mended. A turnaround in the company's North American operations was possible even without restoring links with Ford, he said.

Earlier this month, NHTSA denied a request by Bridgestone/Firestone for an investigation into the Explorer. NHTSA said the tire maker specifically asked it to look into the Explorer's handling and control following a tread separation of a rear tire.

In Tokyo trading Friday, Bridgestone shares fell 0.6 percent to close at 1,550 yen ($11.57).