Traditions Help Protect Bridgestone From Threat of Corporate Raiders
                    September 7, 2000

                    By BILL SPINDLE
                    Staff Reporter of THE WALL STREET JOURNAL

                    TOKYO -- When Firestone Tire & Rubber Co. fell victim to a major tire
                    recall back in the 1980s, the company was taken over by a foreign tire
                    maker, Bridgestone Corp. of Japan. So now that Bridgestone has been
                    hobbled by the current recall at its Bridgestone/Firestone unit, why is
                    no one talking about the same fate befalling the Japanese tire maker?

                                         One big reason: Despite significant changes in
                                         the ownership of corporate Japan, traditional
                                         shareholding relationships still protect big
                                         companies from unwanted suitors, according to
                                         investment bankers and fund managers. "It
                    would be very hard to take over Bridgestone," says Ed Merner, manager
                    of the Atlantis Growth Fund and a longtime investor in Japan. "It would
                    be quite a coup if someone did it."

                    On the surface, the Firestone recall has triggered the sort of crisis that
                    might make Bridgestone, which controls half of Japan's tire market, an
                    attractive target for competitors looking to move into Japan. The
                    problems in the U.S., where Bridgestone gets about 40% of its
                    revenue, have led to a sell-off of the parent company's shares that has
                    cut its market value almost in half, to about $11 billion, and called into
                    question the current management's ability to deal with the problems
                    abroad. Meanwhile, Bridgestone remains a dominant brand in Japan,
                    where foreign companies barely have a presence.

                    Some industry observers don't rule out the possibility of a foreign tire
                    maker eventually attempting to buy a stake in Bridgestone, if the
                    company's problems in the U.S. continue to snowball, weakening its
                    bottom line over time. A Bridgestone spokesman said the company has
                    no plans to sell any part of itself.

                    But don't bet on anyone making a run at buying Bridgestone soon,
                    bankers here say. For one thing, even Bridgestone's shrunken market
                    value would make it a very large acquisition for other major tire makers.
                    The market value of Goodyear Tire & Rubber Co., for example, is only
                    about one-third that of Bridgestone. And if leading tire companies such
                    as Goodyear or France's Groupe Michelin wanted to buy into
                    Bridgestone, they might face opposition from U.S. regulators concerned
                    about one company dominating too much of the North American tire

                    But perhaps the biggest obstacle would be the fortress of shareholders
                    loyal to management surrounding the Japanese company. These include
                    a scion of the founding Ishibashi family, who owns a 3% stake, and a
                    philanthropic foundation that is Bridgestone's largest single shareholder
                    with a 9% stake.

                    Bridgestone's secure position shows how, despite dramatic changes in
                    the ownership of corporate Japan, the management of most major
                    companies is still protected from overt kinds of shareholder pressure
                    such as the threat of a takeover. As with many big Japanese companies,
                    foreign ownership has climbed dramatically at Bridgestone, to 23% now,
                    compared with only 2% a decade ago. But most of Bridgestone's
                    largest shareholders aren't likely to sell against management's wishes,
                    no matter how grim the situation becomes, according to industry

                    The Ishibashi Foundation, which runs several art museums and
                    conducts other philanthropic activities, is forbidden by law to sell the
                    core Bridgestone holdings it received from company founder Shojiro
                    Ishibashi, according to Hideyoshi Kita, a former Bridgestone employee
                    who is now managing director of the foundation. Industry officials also
                    said that major Japanese institutional shareholders, such as Sumitomo
                    Bank Ltd., which owns 3.7% of the company, probably wouldn't sell to
                    a hostile bidder. A spokeswoman for Sumitomo declined to comment.

                    Overall, analysts say that at least one-quarter of Bridgestone is owned
                    by shareholders who wouldn't act against the wishes of the current

                    A move to buy Bridgestone "would be Japan's first hostile takeover bid,"
                    says Chris Redl, an analyst with UBS Warburg in Japan. "And believe
                    me, it would be hostile."