Sunday, March 04, 2001

Firestone bounces back in Tristate

Recall, bad publicity hurt, but didn't kill sales

By James Pilcher
The Cincinnati Enquirer

        Nearly nine months after a recall of certain Firestone tires began, business is brisk at Brogan-Folz Inc. - which prominently features the Firestone brand at its three western Hamilton County stores.

        “Our business is up 20 percent for the year, not down 40 percent like everyone predicted,” said owner Dan Brogan, who has carried the Firestone line for 32 years. “And sure the recall hurt us, but when you measure it all out, it's not killed us.”

  • Total tires eligible for recall: 14.4 million (6.5 million still in use).
  • Total tires replaced: 5.5 million (as of November).
  • Tires eligible for recall: All Firestone ATX and ATX II tires in the P235/75R15 size. All Firestone Wilderness AT tires in the P235/75R15 size that were built at the Decatur, Ill., tire plant. That can be determined by examining the serial number on the inside of the tire — eligible tires begin with the code VD.
  The National Highway Traffic Safety Administration also has issued a consumer advisory for another 24 tire styles, primarily made at the Decatur plant.
  For the complete list, go to
  • Replacement policy: Firestone has said it will replace all tires affected by recall with another Firestone tire or similar tire of another brand, paying up to $100 per tire for the tire itself, balancing and mounting.
  • Deaths associated with tread separation in Firestones: 174 (as of Feb. 2).

  Sources: Bridgestone/Firestone, National Highway Traffic Safety Administration
        Many Tristate dealers say that the August recall of 6.5 million ATX, ATXII and Wilderness AT tires — primarily used on Ford Explorers but also on other sport-utility vehicles — hasn't hurt business.

        In fact, business is booming at several Cincinnati-area stores, leaving many dealers pledging even further loyalty to Bridgestone/Firestone, a subsidiary of Japanese tire maker Bridgestone Corp. That's in direct contrast to national trends, which show Firestone still hurting over the recall.

        “Sure, we still get customers coming in who say they won't get Firestones no matter what,” said Tom Patton, who directs Michel Tire's western Cincinnati stores (the company has 26 stores in the Tristate). “But overall, sales are very good. Heck, 80 percent of the customers who qualified for the recall stayed with Firestones.”

        One possible reason for the pick-up in business is the economic slowdown, when consumers who keep their vehicles will need to replace worn tires, dealers say.

        But another reason may be related to the recall, said Craig Sumerel, director of retail operations for Bob Sumerel Tire Co., which operates 15 stores in Greater Cincinnati and 28 throughout Ohio.

        “It raised safety awareness, and we had older ladies coming in knowing what their serial numbers were and other people checking for tread wear when they might not have otherwise,” Mr. Sumerel said. “It made a lot of people, whether they drove a Honda or a truck, think about tires; and that's good for our business.”

        Still, many consumers continue to express doubts about Firestone. As of Feb. 2, the National Highway Traffic Safety Administration has linked 174 deaths to the problem tires, which were made at the company's Decatur, Ill. plant.

        Sales of Firestone tires sank 40 percent in January alone nationally - a drop that is sure to continue now that the company is involved in another recall of tires used on Nissan Altimas.

        “If I had a choice, I would go Goodyear,” said Dale Gurr, 47, an engineer from Oxford.

        Mr. Gurr said he had problems with the Firestone tires on his 1999 Chevrolet Z-71 pickup that he felt indicated the start of tread separation. He said his truck dealer sent him to the Firestone dealer, where he was told the tires weren't eligible for recall.

        The dealer did not charge Mr. Gurr for the replacement tires, but first charged $100 for an alignment to see if that was the problem, Mr. Gurr said.

        “I still have the Firestones, and that wasn't my choice,” Mr. Gurr said. “I just don't trust Firestone anymore.”

        Firestone officials say the company has retained its market share for off-road tires, but would not provide sales figures. There has been a drop in demand for that style, but company spokeswoman Jill Bratina said that's because of the economic slowdown. More than 50 Tristate stores carry the brand, and the company operates 14 of its Mastercare stores in Greater Cincinnati, Ms. Bratina said.

        Overall, Bridgestone/Firestone is still solvent, and Bridgestone Corp.'s president has vowed that the Nashville, Tenn.-based subsidiary would not go bankrupt despite massive recalls and damage claims.

        The company says it has replaced 5.5 million of the 6.5 million tires under recall at its own expense, part of the cause of an 80 percent drop in profits last year.

        Yet when Bridgestone announced its recent profit figures, company Bridgestone president Yoichiro Kaizaki said “we cannot yet predict with any confidence when sales of Firestone tires will recover.”

        Firestone has retained its original equipment share among car manufacturers, Ms. Bratina said, even though General Motors has announced it was switching from Firestone to Bridgestone tires on some of its models, according to the Wall Street Journal. Ms. Bratina also said she didn't know of any individual dealers dropping the brand either nationwide or locally.

        “We're seeing the dealers more committed to the brand than ever, and that's helping us regain the trust of the American public,” Ms. Bratina said.

        More than 100 lawsuits have been combined under one legal umbrella in a federal court in Indianapolis, with Cincinnati lawyer Stan Chesley bringing three of those suits. He is co-chairman of the plaintiffs' settlement committee.

        He said that the litigation is far from over, and could extend to Ford for its handling of the recall.

        “And we may be going after either Ford or Firestone for the diminished valuation of the Explorer because of this,” Mr. Chesley said.

        Verna Carter knows about that phenomenon. The Wilder mortgage saleswoman tried to sell her 1998 Explorer on the open market to help pay off her lease, but didn't get a single call.

        “I had people ask me on the street about it, but then they would say they were afraid of the tires,” said Ms. Carter, who wound up taking a $2,200 loss when she completed the lease because she was over the mileage limit. “And it hurt, because I used to sell Fords. I have no problem with either Firestones or Ford and even got another Explorer. But there are a lot of people out there who don't feel the same way and there will be an effect eventually.”


- Firestone bounces back in Tristate
Partners make welding look easy
BYCZKOWSKI: Baby steps for firms in incubator
What's the Buzz?
Industry notes: Commercial real estate
Commercial real estate projects
Commercial real estate transfers
Tristate Business Notes
Business meetings this week
Business seminars this week
Backyard gas wells can become money pits
Global markets beckon small companies