Paolo Ferrari: Bridgestone building on success with renewed focus

NASHVILLE, Tenn.—Bridgestone Corp.'s management may be structured a little differently than it was a full year ago.

But that is just about the only thing that's changed.

Because Bridgestone's vision for growth, its commitment to an inclusive and supportive company culture, and its drive to deliver the products that meet industry and customer expectations for performance and sustainability hasn't wavered.

In fact, Bridgestone Americas Inc. Executive Chairman Paolo Ferrari would say it's stronger than ever before thanks to the new alignments.

In October, Bridgestone Corp. detailed plans to restructure its global management into two segments. Bridgestone West—encompassing the Americas, Europe, Middle East and Africa—and Bridgestone East—which includes China, India and the Asia-Pacific region.

And while it sounds like drastic change, Ferrari says it's more about perspective. It's about stronger alignment—leveraging ideas and best practices.

"The East and the West have some difference in business cultures, have some difference in the pace of innovation, have differences that we need to be mindful of," Ferrari said during a recent Bridgestone Thrive Podcast. "And therefore, at the time, the global CEO, Shuichi Ishibashi, thought it would be worth it to begin to focus on these two regions in a way, independently, (but) of course within the global vision and strategy that we have developed in the last several years."

That new management structure took effect Jan. 1, and it called on Ferrari to take on some new leadership roles.

He remains executive chairman of Bridgestone Americas, but also is CEO of Bridgestone West, and joint global chief operating officer and global chief digital transformation officer for Bridgestone Corp.

Those roles allow him to lead in exactly the way the new management structure intends. He can help the company leverage strengths and processes for implementation at local, regional and global levels.

And he can do that without losing sight of North American growth opportunities.

"There are certain areas where we are stronger in Europe, or where we're stronger in the U.S.," Ferrari said. "I think retail is a good example. Of course, we have very, very strong retail operations here and in Europe, certain pockets are good and others need to be improved."

And when it comes to tire development, there is a lot of expertise and knowledge to share between the regions that make up the West. Doing so allows for Bridgestone to bring forward better performing products.

For instance, Europe's winter tire expertise offers valuable insights for North American-focused engineers, while the North American all-season know-how opens opportunities for European tire development.

Because in the end, Ferrari said, the aim of the newly structured company is about building a stronger, more cohesive Bridgestone. And to harness that potential, Ferrari said, the tire maker must "aggressively execute and deliver results."

When it comes to delivering results? Well, that's what Bridgestone Americas does, he said.

In the last four years—the time that Ferrari has been at the helm of Bridgestone Americas—the North American mobility company has diversified, divested, grown and invested in opportunities that set it up for success.

"We have introduced new businesses, we have invested in VCs, we have invested in (operations) … and everything is very much consistent and aligned with the (corporate) strategy," Ferrari said of the last four years. "So we have done so much. And, honestly, I think it is one of the reasons we have done well financially in the last few years."

Bridgestone's 2022 North American rubber products sales—both tire and non-tire—was around $13.17 billion, making it the No. 1 rubber product maker on the continent, according to Rubber News data. Those 2022 sales marked a $1.67 billion improvement over 2021 and a $2.47 billion improvement over 2019.

And as the company heads into 2024 and beyond, with a clear vision for growth and a commitment to its core products and services, Bridgestone expects to continue thriving.

As Bridgestone Americas moves forward—more connected and in sync with its counterparts across Bridgestone West—it is doing so with a commitment to mobility.

"First, I would say that we are more and more considered not just a tire company, but a mobility solutions company," Ferrari said on the podcast. "Actually, one of the analysts' reports called us a mobility technology company, which is great news. So they are beginning to see what we are doing."

What Bridgestone is doing is constructing an all-encompassing kind of mobility business, one built on the foundation of what it does best—tires. Because Bridgestone is a tire maker—a premium tire maker—at its core.

And that isn't changing.

"When we talk about edge, it means premium. It means technology edge and, eventually, it means profit and profitability," Ferrari said. "So our business is profitable, has been profitable and will continue to be profitable if we continue to invest in technology."

So the products it launches are—and should be—the most sustainable and highest performing possible, Ferrari said. Bridgestone's tires are designed to meet every expectation of OEMs and consumers, from longevity to size.

"A few years ago, and still today, premium and technology and profit in tires were about HRD, higher-rim diameters," Ferrari said. "And by the way, at the time, it was 17 inches and above. Today it is 18 inches and above, but now we talk about ultra HR—20 inches and above."

But Bridgestone is doing more than building better, bigger tires.

Around its tire expertise Bridgestone is strengthening its service offerings with connected technologies, fleet management and retail operations. These, Ferrari said, are the kinds of components that allow Bridgestone to stand out in the tire space as a mobility company.

"I think one of the assets that is mostly undervalued—or underestimated—is our retail company," Ferrari said. "… And I think we need to do a better job telling the story to the market because it's a hugely valuable asset for customers, for our fleet customers and in the deployment of our Bridgestone 3.0 strategy as a whole."

There's also something to be said about the non-tire-related business within the Bridgestone family and the role it plays in supporting the new mobility transition.

The company's anti-vibration products, for instance, are essential to the electric vehicle transition as they help ensure smoother, quieter rides—something valued by EV drivers who no longer have the engine's hum to mask the vehicle's rattles and road sounds.

Just about one year ago, Bridgestone rebranded its air springs business as Firestone Airide—an homage to the company's first air springs introduced in 1936. It's a component of Bridgestone's business that will play a key role in its mobility ambitions.

"It's an established business," Ferrari said, "but of course, new segments like the whole EV—I would say, evolution—really values our product."

Value, in the end, is built into Bridgestone, its tires and non-tire products alike.

Because Bridgestone products start with sustainability. And that commitment to more sustainable products and operations is essential as Bridgestone moves forward, Ferrari said.

Perhaps that sustainability commitment is best embodied by the company's retread focus and its Enliten technology suite.

"We have worked very hard within the retread business. Of course, retread is another area where (Bridgestone Americas) is super strong," Ferrari said. "I mean, retread in the U.S. is one of our most successful businesses. It's actually one of our first service solutions businesses that Bridgestone engaged in with the acquisition (of Bandag) in 2007."

Successful, indeed. And sustainable too.

Bridgestone/Bandag easily is the retread market leader, according to the Tire Retread & Repair Information Bureau, which estimates the company's U.S. retreaded truck tire market share to be around 44 percent.

For perspective: No. 2 Michelin/Oliver, maintains roughly 24 percent of the market, while Goodyear holds about 22 percent of the truck tire retread market share. The remaining players hold single-digit market percentages.

Bridgestone sees great reason to encourage retreading, too. Because it saves significantly on raw materials and reduces the number of end-of-life tires. Bridgestone and the U.S. Tire Manufacturers Association estimate that retreading has the potential to, among other things:

• use 15 fewer gallons of oil and 90 fewer pounds of total material per tire;
• save about 215 million gallons of oil per year in the U.S. and Canada; and
• remove about 1.4 billion pounds per year from the waste stream.

And when it comes to more sustainable, that's where Enliten can make a difference.

Because Enliten—a tool box of sorts—gives Bridgestone the materials and processes that lead to greater sustainability. The kind that leverages sustainable materials for the kind of performance that preserves fuel economy, extends range and lets tires last longer.

"We talk about Enliten technology, which means also not just continuing to improve our core—I would say 'traditional' feature of the performance of a tire—but also the sustainability component, which is around rolling resistance, which is about wear and also about material circularity numbers."