TOKYO (May 16, 2008) — Japanese tire and rubber product makers Bridgestone Corp. and Toyo Tire & Rubber Co. Ltd. are discussing possible alliances that could include cross manufacturing arrangements, cooperating on raw materials procurement and logistics, and joint development of production methodologies.
To facilitate the discussions, the two companies have exchanged minority ownership stakes in each other, according to a joint statement by the firms. Toyo — the 11th largest tire maker worldwide in 2006 — will issue 20 million shares, equal to an 8.72-percent share, and assign them to Bridgestone — the world's largest tire maker that year. It in turn will allocate 3.9 million of its shares, or 0.48 percent, to Toyo.
The firms cited unprecedented changes in the business environment — including the “bipolarization” of the market into high-performance and general purpose products, the effects of the emerging power of low-priced products and structural changes related to rising raw materials costs — as the reasons for investigating possible alliances.
The discussions will look at the firms' tire and non-tire activities, the statement said. The companies' project teams are expected to provide an outline of proposed alliances by this fall.