Bridgestone forging forward with new products

NASHVILLE, Tenn.—The COVID-19 pandemic may have altered the way the tire business—really almost every business—operates once the entire country is reopened, but don't expect one aspect to change for Bridgestone Tire Americas Inc.

The tire maker remains on track to expand its Bridgestone- and Firestone-brand product portfolio by more than 100 SKUs in North America this year.

TJ Higgins, global chief digital strategic officer and global chief business strategic officer, Bridgestone Corp., said the company is "pretty much on track" to launch every product planned, not only for this year but 2021 as well.

"Tire builds are more challenging to get done (remotely)," Higgins said during an exclusive interview with Tire Business. "We have been reallocating what we do and when we do it. But our teammates have been pretty adaptable and they are working safely and pretty effectively, and all of the product launches are still on schedule as planned."

Among expansions of consumer products in the pipeline are:

• The addition of 66 sizes of the Firestone Destination LE3 all-season light-truck tire, the company's No. 1 selling pattern; shipping to dealers began in April.
• New sizes for the Firestone Firehawk Pursuit (six sizes) and Firehawk Pursuit AWT (five sizes), bolstering the range for law- enforcement fleet customers;
• Eight additional sizes of the Firestone Destination X/T all-terrain light truck/SUV tire line, providing coverage for larger-rim-diameter fitments;
• One additional size each for the Transforce CV and Winterforce CV commercial van tires, improving coverage for last-mile delivery vehicles; and
• Six sizes of the new Bridgestone Blizzak LM005 winter tire.

"Our (research and development) teams have been incredibly flexible," Higgins said. "Our information technology team had us prepared in advance to work remotely. Our systems have been up and running pretty effectively throughout this difficult period. ... Our teams are available to effectively work from home."

On the commercial side, Bridgestone will launch the Firestone FD692, a SmartWay-verified drive-axle tire that will be available in four sizes this year. It also will expand the Bandag MaxTread retread line for waste, over-the-road and last-mile delivery segments, increasing coverage to nine SKUs from eight.

"In addition to the new launches this year," Higgins said, "we are laser-focused on ensuring that the development and industrialization for our 2021 planned launches are moving forward to ensure that our portfolio continues to be strong and provides the best support possible for our dealers as we move into recovery."

Bridgestone—the No. 1 ranked tire maker in terms of fiscal 2018 global sales, as published in Rubber & Plastics News' 2019 Global Tire Report—has been able to weather the coronavirus storm, Higgins said, first by taking decisive steps early to fortify the supply channel, then by making difficult financial decisions to reduce costs once the pandemic hit North America.

That means that supply remains strong, despite a host of plant shutdowns of various lengths across the world.

"I feel very comfortable that our supply chain is ready to meet demand needs," Higgins said. "We haven't seen any issues yet, and I anticipate as we come out of this, that we are well-positioned to manufacture to demand."

The plant shutdowns certainly provided the most significant savings as the pandemic hit. Bridgestone, like most tire makers, furloughed employees across its retail stores, manufacturing plants and corporate offices.

According to a spokesperson, the tire maker furloughed 7,000 of its 22,000 retail store employees, as well as several hundred employees who work at factories and corporate offices. Furloughs typically range from six to eight weeks.

In addition, executives across the company took voluntary pay reductions, ranging from 10-15 percent, "depending on roles and functions," Higgins said.

"We're looking—to the best of our abilities—to control our expenses that are discretionary and that are not being tied to activity needed today and consider our cash flow, so that we can support the business for the recovery that we are confident will come."

Higgins said Bridgestone's "financial position has been solid and remains solid coming into this crisis. Our company has done a nice job of managing our balance sheet."

Higgins said the market seemed to bottom out in early April, down 30-40 percent, but the company is seeing a slight improvement as government programs started to roll out.

"Since stimulus checks started to come and the government was able to put some of those support program in place, we did start to see a slight improvement on that negative," he said. "It's still very negative, but probably about 10 points of improvement from the low."

Once states begin to open—Tennessee, where Bridgestone Americas is headquartered, was one of the first to do that—Higgins expects consumers to resume travel, ramping up tire demand.

Bridgestone has been in contact with its OEM customers, learning what vehicles they will produce initially so it can then adapt tire production schedules around that OE demand.

The stay-at-home orders initiated across the U.S. and Canada have had some benefits, Higgins said.

First and foremost has been staying in close contact with customers, wholesalers and dealers via video conferencing, as well as adapting to working remotely.

"In-person meetings are critical," he said, "but maybe we can touch bases more frequently through video (in the future).

"It keeps you closer. I'm optimistic that some of the challenges we have in learning to work remotely here will let us work more efficiently coming out of this crisis."

Higgins also noted that consumers are becoming more comfortable with online activities as well as contact-less service, such as electronic appointments, curbside drop-off and a specific pickup time.

"That flexibility and planning is something they are really appreciating," he said. "...That concierge-type service could stay with us and could possibly create even more satisfaction among customers that we serve."

Higgins said Bridgestone has maintained contact with its dealer network—he said the company has released 12 online training courses over the last six weeks.

"We're trying to share with our dealers the things that we are sharing and learning and that we're hearing from other industries," he said.

His message to dealers: Stay the course.

"Let's keep that partnership. ... Be focused on customers and customer experience. As business starts to turn, all of us that are serving customers in a better way will be very happy with the growth that we're going to see and the satisfaction from our end users that will make our business successful in the months and years ahead."