Bridgestone hit by safety drive

Yoichiro Kaizaki (left): optimistic about the future

Troubled tyre maker Bridgestone, reeling from a massive safety recall, has unveiled an 80% slump in profits.

The firm, the world's largest tyre maker, has blamed the recall of 6.5 million tyres in the US last summer for prompting the plunge in net profits to 17.7bn yen (£105m) for 2000.

Bridgestone's US-based Firestone subsidiary was forced to recall the tyres after models fitted mainly to Ford Explorer vehicles were linked by US safety inspectors to road accidents which caused 148 deaths.

And Bridgestone has now called in nearly 100,000 tyres fitted on Nissan cars, after researchers discovered a design flaw.

US sales of Firestone tyres plummeted by 40% in January, compared to a year earlier.

And the firm warned that the slowdown in US car sales from last year's record highs would further weaken the tyre market.

"We are forecasting that tyre sales will have to decline in the US due to the recall and also on weakening demand as a result of falling production of new cars and trucks there," a company statement said.

Revival plans

But while the profits were the lowest since 1991, they beat forecasts made in December, when the company booked a $750m (£520m) special loss relating to the recall.

And outgoing Bridgestone president Yoichiro Kaizaki said he was heartened that Firestone was still maintaining a 20% share of the overall US tyre market.

"We took a hammering after the recall incident, but we are glad to see that 30% of [Ford Explorer] drivers still choose our tyres," Mr Kaizaki said.

"We are planning to restore the brand image of Firestone and we hope to see [US operations] return to the black by the latter half of 2002."

The firm's US subsidiary, Bridgestone/Firestone, ran at a loss of $510m last year, Mr Kaizaki revealed.

He also blamed rising costs of raw materials and the strength of the yen for contributing to the decline in the overall Bridgestone profits.

Bridgestone shares, which have shed more than 50% since early August, when US officials launched safety investigations, lost a further 1.13% in Tokyo on Thursday to close at 960 yen.