Firestone CEO Suddenly Finds Himself at Center of the Storm

It’s already been a horrific week for Masatoshi Ono, chief executive of beleaguered tire maker Bridgestone/Firestone.

Three weeks into a company recall of 6.5 million potentially defective tires, Ono was ordered to give a deposition in a wrongful-death trial, had four congressional investigators nosing around his corporate offices and became engaged in a public dispute with Ford Motor Co., his biggest customer, over the necessity of a recall of Firestone tires in South America.

After Ford claimed that tires it ordered in Venezuela lacked a key safety layer of nylon, Bridgestone/Firestone at first denied it and then acknowledged that “some” tires indeed lacked the component.

And Rep. W.J. “Billy” Tauzin (R-La.), who has called hearings next week on the tire problems, declared, “The evidence cries out to us from those graves that something didn’t work, something was wrong.”

And all that was just Monday.

Ono is at the center of the Firestone tire maelstrom, a crisis with new questions every day but none of the most basic answers: What caused certain tires, predominantly from one Illinois factory, to lose their treads on U.S. highways? How many deaths might faulty tires have caused? (U.S. authorities are investigating at least 54 fatalities and more than 100 injuries possibly related to now-recalled Firestone tires.)

Outwardly, the stocky, gray-haired Ono exudes calm and quiet confidence. He speaks methodically, beginning his answers to most questions with pledges to meet customers’ safety and satisfaction expectations.

He is a company man--he joined Japan’s Bridgestone Corp. in 1959 fresh out of college with an electrical engineering degree--the bridge between the Tokyo-based parent company and a century-old American institution.

But he is also a besieged man, as the howls from consumers, dealers and lawyers mount.

“For me, it’s the first time to have such an experience,” he said, sucking in his breath in an interview last week at the company’s Nashville headquarters. “It’s quite a challenge to me. To say there’s no stress would be a lie.”

Firestone Tire & Rubber, formed in 1900, nearly folded after its last recall crisis, involving 14 million Firestone 500 tires in 1978 that also were subject to tread separation. Japan’s Bridgestone acquired the still-struggling Firestone in 1988 and shortly sent Yoichiro Kaizaki to the U.S. to be its chairman.

Kaizaki is credited with reviving the brand and making the Bridgestone/Firestone unit profitable. He was seen as rewarded for his performance in the U.S. with the top post of the giant parent company.

While in the U.S., Kaizaki personally summoned Ono over as part of his management team, a source close to Ono says. Ono took the reins of Bridgestone/Firestone in 1992 after Kaizaki returned to Japan to head up parent Bridgestone, a post he still holds.

Although chairing Bridgestone/Firestone in the U.S. was a steppingstone to the top for his predecessor, Ono’s future is suddenly clouded at Japan’s largest tire manufacturer. The fast-growing recall crisis has left Ono between a rock and a hard place.

“In Japanese corporate politics, careers are not made on one event, but they can be destroyed by one event,” says Jim Hall, an analyst at the consultancy AutoPacific in Detroit and a former GM product planner who worked in Japan with Toyota for three years.

“This is a case of negative reinforcement only,” Hall said. “By the time you get to the level he’s at, the head of a major operation, you can lose your standing over something like this. Or he could do everything right, and still not make it.”

So how is Ono doing? Bridgestone/Firestone does not release U.S. sales figures, but David Zielasko, editor and publisher of Akron, Ohio-based Tire Business magazine, says the company, the second-largest tire maker in the U.S., has been one of the fastest-growing in the country.

From 1998 to 1999, Zielasko estimates that the company’s sales rose from $4.8 billion to $5.2 billion, compared to $6.2 billion to $6.3 billion for industry leader Goodyear Tire & Rubber Co.

“Ono-san is an outstanding individual who has greater technical understanding than any tire CEO I’ve encountered,” says Trevor Hoskins, a former executive vice president at Bridgestone/Firestone who also worked at Goodyear for 18 years.

Some observers say Ono’s age--he is 63--could weigh against him in the running to succeed Kaizaki. But those who know Ono believe in him.

“I believe he’d be a very competent chief executive if the timing was appropriate,” Hoskins says. “I’m certain he could do it.”

Ono pledges to again rescue the tarnished name of Firestone, which he insists still enjoys 100 years of trust from its customers. “We’re going through all kinds of ways to revive the brand,” he says. “I am sure we can do this.”

To that end, the company has been taking out newspaper ads to explain to customers how to comply with the recall, and stressing the importance that Bridgestone/Firestone places on quality.

Recent ads have even carried Ono’s picture, somewhat out of character for the normally private chairman.

“I think he is trying to play the correct role for the company and let his senior North American executives handle the day-to-day,” says Hoskins, who reported to Ono for six years. “Generally, Japanese executives are more reluctant to be in the public eye than Americans. It’s more important to be seen as a team player.”

But consumer confidence in Firestone, not surprisingly, has plummeted. In a poll of about 2,900 people shopping for tires by research firm CNW, only about 5% said they would consider buying Firestones, down from more than 20% before the recall.

“‘It has reached the point where Ford must seriously reconsider its alliance with Firestone and Bridgestone must take a deep look at the cost of even retaining the Firestone name,” says CNW Vice President Art Spinella.

But Ono insists that is not an option. And while consumer trust in the brand will fall along with market share, trying to replace Firestone with another brand could end up being even more costly, says Tsunemi Tachibana, an industry analyst with Nikko-Salomon Smith Barney in Tokyo.

“Yes, Firestone has a bad image right now, but to boost consumer awareness of another brand would take great expense and time,” Tachibana said in an interview. He thinks Ono should rebuild the Firestone brand not by lowering prices--margins in the tire business are already thin--but through such promotions as test drives and heavy advertising. “They don’t have the cash flow to gain back market share by discounting prices,” Tachibana said.

More immediate is Bridgestone/Firestone’s relationship with Ford, its biggest customer--and, for the moment, its Achilles’ heel. Hoping to put some distance between the Ford Explorer--the best-selling SUV in the U.S.--and the tire recall, the car maker has emphasized the vehicle’s safety record on non-Firestone tires. It also has moved quickly to find flaws in Firestone tires it installed on its vehicles in Venezuela.

But most obvious has been the way Ford moved quickly to release damning data analysis two weeks ago that showed specific tire models, primarily made at Firestone’s Decatur, Ill., plant, were involved disproportionately in the fatal accidents under investigation in the U.S.

Ono seems unflustered by Ford’s control of the news as details emerge, saying that in the business world, he does not really see a difference between Japanese or American companies in taking quick action.

“As for problems with Ford, and perceptions that we felt there should be a recall at a particular stage, and Ford from another stage, we were completely working together, communicating with each other 24 hours a day,” Ono says.

Adding that he senses no corporate cultural gap in the situation, Ono said that both companies “are completely in line with each other. Customers’ safety and satisfaction are our No. 1 concerns.”

Ford officials, while pointing fingers squarely at Bridgestone/Firestone, say the auto maker and tire manufacturer nevertheless have the same aims.

“I think there was an agreement once we saw that there was some confusion out there,” said Jason Vines, Ford’s vice president for communications. “We wanted to make sure that [customers] had every bit of information that we had at our disposal and saw every bit of data that we made our solutions and our conclusions from.”

So far, Ono has remained philosophic, even optimistic.

“In a way,” he says, “it’s a good opportunity . . . to enhance the basic strength of the company, so we will never have to go through this process again.”