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May 08, 2008 02:00 AM

BFS integrating commercial, Bandag units

Kathy McCarron
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    NEW YORK—Bridgestone/Firestone promised truck tire dealers and retreaders at its Bizcon12 commercial tire conference that the recent merger of its commercial tire operations with the Bridgestone Bandag L.L.C. retreading unit will provide more selling synergies and increased fleet business.

    The company said during the conference, held April 21-22 in New York, that creating Bridgestone Bandag Tire Solutions is its answer to dealers' requests for more integration of commercial tire operations, more field sales people and more fleet customers.

    “Basically, what you're looking at is a $3 billion, highly integrated operating unit with a very flat sales and marketing organization,” said Saul Solomon, president of Muscatine, Iowa-based BBTS.

    The restructuring includes dividing its four sales regions in the U.S. and Canada into eight, and training the newly combined sales force so that former Bridgestone and former Bandag salespeople “will be indistinguishable,” according to Art Campagnoni, vice president of North American commercial sales.

    The sales reorganization is expected to be more responsive to customer needs, BFS officials said.

    As far as its three tire brands and Bandag retread brand are concerned, BFS said the Bridgestone and Bandag brands will be offered in all distribution channels. Firestone will be sold through dealer, truck stop and government channels, and Dayton will be available in the dealer network.

    In an effort to improve profits, “we're better rationalizing what we sell, who we sell it to, and what business we must walk away from,” said Mark Emkes, chairman and CEO of Bridgestone Americas Holding Inc. “That means we must walk away from unprofitable products and business unless there's a strategic reason to do otherwise.”

    Company officials admitted 2007 “was a very challenging year,” with skyrocketing raw material and petroleum prices, a soft tire market and declining original equipment purchases.

    The company expects continued tire price increases in the foreseeable future. Despite this, Bridgestone Americas Holding, which represents 43 percent of Bridgestone Corp.'s sales, achieved an after-tax profit for the first time since being formed in 2001.

    In an effort to build on this growth, BFS will pursue a three-step strategy that includes creating more competitive value-added products; implementing a more efficient vertical integration structure to provide consistent delivery of raw materials to manufacture its products and deliver them in a timely manner; and demonstrating corporate social responsibility.

    Bridgestone said it is focusing on continued development of passenger run-flat and ultra-high-performance tires; new low-profile and fuel efficient truck tire designs; on/off highway tires designed for profitable segments such as waste management; and building more competitive, large and ultra-large off-the-road and specialty tires.

    The company plans to invest more in research, development, quality processes and production capacity. This includes expanding OTR production capacity by as much as 40 percent by 2011 with its new tire plant in Kitakyushu, Japan, where production is set to begin next year.

    The firm also is vying for a leadership role in low-rolling resistant, fuel-efficient and low-profile radial truck tires, as well as low-profile super singles, particularly its Greatec line.

    Despite the purchase of Bandag—the largest truck tire retreading franchise system in North America—Solomon said BFS will continue operating its single Oncor mold cure plant in St. Louis, which caters to customers such as the TravelCenters of America Inc. chain.

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