NASHVILLE, Tenn.—Things are looking upscale for Bridgestone/Firestone´s North American consumer original equipment team.
From the perspective of Michael Martini, president of the BFS unit, that means his firm is now the top supplier in this country to BMW, after selling the auto maker no tires five years ago. It also means a consistent 30-percent share of business with Lexus and the first Bridgestone fitment on a Cadillac vehicle.
And finally, it means that 75 percent of the passenger and light truck tires BFS sells to auto makers are the premium Bridgestone-brand rather than Firestones, up from roughly 40 percent in 2000.
BFS started focusing on increasing its upscale fitments several years back and now is starting to see the strategy work, according to Martini.
"We have developed a plan and we´re executing a plan," he said. "Part of being a business leader is understanding what your company´s competitive advantages are and playing to those. And for us, at our original equipment group, what helps are a couple of things: great technology and a great ability to manufacture products of the highest quality."
Likewise, BFS expects to play less of a role on the mass market, entry level vehicles. "We´ll play a part there but we don´t really want to be a major player in those areas," he said.
Martini said that this focus on better technology also may lead to greater acceptance of run-flats at the OE level, with more firms following BMW´s lead in this area. He sees a couple of factors that will help run-flats grow. First is legislation mandating use of tire pressure monitoring systems—one of the items that is necessary for a run-flat system.
That in turn may push the auto makers to take the next logical step and give consumers more run-flat options. With tire makers doing a better job at balancing ride comfort with run-flat durability, he expects that certain segments—such as perhaps minivans—will see greater proliferation of run-flats.
"The OEMs have to embrace it, there´s no question," Martini said.
Martini has spent 23 of his 28 years with the company on the OE side of the business, and he now sees a big difference in how the OE game is played. No longer will you see tire makers blindly going after OE fitments, he said.
"We´re trying to change the OE model," he said. "(With auto makers as customers), it´s not an easy thing to accomplish. This is what I tell the OEMs: ´If we´re going to put capital into a business, then it has to be able to drive profitability.´ "
One structural change that aids tire makers is the movement of the business from just the "Detroit Three" to include the many transplant auto makers now producing vehicles in North America. BFS currently has "good share positioning," he said, at every OEM in North America except with Ford Motor Co. The tire maker dropped Ford as a customer during the tire recall and recently agreed to pay the auto producer $240 million to settle all remaining Ford Explorer-related financial issues.
"For the first time, the supply environment is not just so centric to three potential OEMs," Martini said.
That also brings some leverage in pricing, especially if the vehicle makers expect their tire suppliers to keep up with ever-escalating technology demands. "I think the OEMs are starting to understand that and I think they´re starting to react positively to that," he said. "It´s still incredibly difficult to get any price relief, but you have to try and you have to succeed."
He acknowledged that BFS´ consumer OE business still doesn´t post a profit, but said the unit is going in the right direction.