By TODD ZAUN, PHRED DVORAK, NORIHIKO SHIROUZU AND PETER
Staff Reporters of THE WALL STREET JOURNAL
TOKYO -- In March last year, a 58-year-old employee at a unit of
Bridgestone Corp. called upon company chief executive Yoichiro Kaizaki
to complain of having been demoted in a cost-cutting drive. Then, the
worker killed himself by plunging a long knife into his stomach.
Japanese tabloids dubbed it the "restructuring
seppuku," after the old samurai practice of ritual
suicide. They portrayed Mr. Kaizaki as a symbol
of a cold new cost-cutting ethic sweeping Japan.
Mr. Kaizaki's response? Silence. Only four months later did he speak
about the tragedy in public, and he was defiant.
"I've reduced the number of workers, cut the number of directors ...
and cut the dividend," the beefy executive said at an earnings briefing
for reporters last summer. "Because of this, Bridgestone has come this
far. I don't think that what I've done was a mistake."
A year later, the 67-year-old Mr. Kaizaki is again at the center of a
firestorm. This time, the future of Bridgestone, one of Japan's most
revered businesses, is at stake. The company's U.S. unit,
Bridgestone/Firestone Inc., last month recalled 6.5 million
Firestone-brand tires after consumer complaints and lawsuits linked
them to fatal accidents, primarily involving Ford Motor Co. Explorer
Once again, Mr. Kaizaki maintained a stoic silence,
even as public outrage mounted in the U.S. and
Bridgestone's value in the Japanese stock market
dropped by half.
Monday, Mr. Kaizaki finally broke that silence during
a packed 90-minute news conference at the Tokyo
headquarters of the Keidanren, Japan's big
business lobby -- and he came out swinging.
Though he expressed regret over the controversy,
he sought to deflect attempts by Ford to pin the
blame on his company. In his deep baritone, the
executive forcefully denied Bridgestone had sought
to hide information about the affair from U.S.
"There are worries about the future of Firestone," Mr. Kaizaki conceded,
"but we promise to support the Firestone brand with the total strength
of the Bridgestone group."
Mr. Kaizaki is a rare breed in corporate Japan, where conformity and
consensus-building are the norm. He is a cost-cutter with the drive, and
nerve, to restructure an old-line industrial company. He has made a
career of weathering controversy, as he did in the mid-1990s, when he
brushed off sharp criticism from President Clinton over
Bridgestone/Firestone's efforts to break a strike at some of its U.S.
"Even if 80% of people resist me, I don't care," he said in late 1994,
the height of the bitter labor dispute, which many observers concluded
hurt both the company and workers. "I'm not a politician, so I don't
need to be elected based on popularity."
But today, with Firestone tires possibly linked to
88 deaths in America and 47 in Venezuela, Mr.
Kaizaki and Bridgestone risk being undone by
the stubborn combativeness that fueled his
ascent. He now faces two key questions: Does
he possess the public-relations skills that will
buy him enough time to get to the bottom of
what happened at Bridgestone/Firestone? And,
if he does, will he have the candor and courage to fix what he finds?
The furthest Mr. Kaizaki would go Monday in signaling this kind of
boldness was his comment that he wished Bridgestone had exercised
more control over its U.S. operations and done more to ensure that
Firestone divisions met the parent company's standards. "We should
have applied our standards to things like technology and quality
assurance," he said. But he stopped short of saying specifically that
lower standards contributed to any problems with Firestone tires.
The controversy marks a huge personal setback for Mr. Kaizaki, an
executive who made his name in the early 1990s by leading
Bridgestone's original effort to turn around Firestone, which the
Japanese purchased in 1988 after an eerily similar recall scandal had
hobbled the American firm. Mr. Kaizaki said at his news conference he
himself hadn't heard of reports that Firestone tires were linked to an
unusually high number of accidents involving Ford Explorer vehicles until
May, which is when the affair first began attracting widespread
Since Bridgestone/Firestone announced its recall
on Aug. 9, documents have surfaced indicating
that the tire company and Ford knew about
problems with Firestone-equipped Explorers in
the late 1990s but didn't bring them to the attention of American
consumers or safety regulators. The tire models recalled were 15-inch
ATX, ATX II and Wilderness AT.
In what may prove to be a miscalculation, Mr. Kaizaki left the initial
public-relations effort to Bridgestone/Firestone's president, Masatoshi
Ono. Mr. Ono, who shares his boss's weak grasp of English but lacks
Mr. Kaizaki's gruff charisma, came across as tentative and
unforthcoming in the U.S. media glare.
Bridgestone executives say that Mr. Kaizaki did remain directly involved,
leading a team of about 20 senior people that met daily in Tokyo to
handle the mounting crisis. Monday, Mr. Kaizaki disclosed that he had
made a secret trip to the U.S. to assess the situation, but he and his
spokesmen refused to elaborate on the mission. A senior Ford
spokesman declined to comment on Mr. Kaizaki's remarks.
Within Bridgestone, the need for Mr. Kaizaki to take a more public role
became clear last Wednesday, according to company executives. On
that day, Mr. Ono and Ford's chief executive, Jacques Nasser, were
summoned to testify before the U.S. Congress in Washington. In
Tokyo, Mr. Kaizaki and his crisis-management team gathered at
Bridgestone headquarters to watch the proceedings on a large screen,
according to one of the team members.
From 11 p.m. Tokyo time until noon the next day, the executive team,
fortified only by coffee, mineral water, cookies and rice crackers,
watched as American lawmakers grilled Mr. Ono and others. Many of the
executives, Mr. Kaizaki included, couldn't grasp the finer points because
of limited English skills, according to the team member. But by the end
of the marathon session, one thing was clear: Mr. Ono, himself wearing
an earphone to hear a Japanese translation of the hearing, was failing to
get the company's message across.
Monday, Mr. Kaizaki did bat back at Ford, which has blamed its tire
supplier for the entire Firestone fiasco. He said he was struck that
accident rates were much higher for Explorers fitted with Firestones
than for other vehicles that used the brand. The ATX and ATX II were
also sold as original equipment on the Nissan Motor Co. 4-by-4 and
Mazda Motor Co. Navajo pickups, respectively. The chief executive also
repeated, in passing, Bridgestone's argument that low tire pressure
may have played a role in some of the Firestone failures.
Mr. Kaizaki strongly rejected suggestions that Bridgestone deliberately
concealed from U.S. regulators reports of accidents involving Firestone
tires in Saudi Arabia and Venezuela dating back to 1997. "There has
been some talk of a coverup, but I want to emphasize that there was
no such thing," he said.
Indeed, the cause of the accidents, which involve the rubber tire tread
peeling off on the road, remains a mystery. It still isn't clear whether the
fault lies with Firestone's tires, Ford's vehicles, driving conditions,
consumer behavior or some combination of these elements.
Mr. Kaizaki also betrayed, briefly, signs of emotional strain. He recalled
the days a decade ago when he was in America struggling to turn the
then-troubled subsidiary around. "I am very aware that we have
suffered a nearly fatal blow," he told reporters. "But we came back from
the same place 10 years ago, and it's not impossible to do so again," he
said, his voice trailing off to a whisper. He paused to compose himself,
then said, "I think I can do it."
This scene marked a low point in the history of Bridgestone. The
business was founded in 1931 by Shojiro Ishibashi, whose family name
means "stone bridge," hence the use of the English word for the
company name. "Bridgestone" also evoked the venerable Firestone,
which had been founded in 1900 in Akron, Ohio.
Mr. Ishibashi amassed a huge personal fortune, built three art museums
and married a daughter into a powerful clan of Japanese politicians.
Company lore has it that he and his son, Kanichiro, treated workers like
part of an extended family.
Mr. Kaizaki, the scion of a well-to-do soy-sauce brewing family, earned
degree in economics from the elite Kyoto University, but rather than
take over the family business, he first went to work for a local bank.
Despite his comfortable upbringing, his tastes were those of a typical
salaryman, including playing mahjongg and golf. At the age of 28, he
left banking for Bridgestone.
It was 1962, and this was a bold move in a society in which job-hopping
was rare. A hard-charging outsider at Bridgestone, Mr. Kaizaki carved
out a career in management jobs far afield from the company's main tire
business. Running little fiefs producing such things as conveyor belts
and golf balls, he learned how to oversee entire businesses, say current
and former Bridgestone executives.
He also developed a talent that would one day take him to the top:
turning around troubled manufacturing operations. "There are all these
product types, so there's always something or other that's in the red,"
he recalled in a 1999 interview with a local magazine. "So you're always
having to return to the black a company ... or a product line that's in
In normal times, Mr. Kaizaki's rough edges and lack of experience in the
core tire business might have capped his rise at Bridgestone. But in
1988, after much agonizing, the company took an uncharacteristic risk,
acquiring the ailing Firestone. Bridgestone soon discovered that
Firestone had never fully recovered from a 1978 recall of about 13
million tires. In 1991, Firestone was losing $1 million a day.
Early in 1991, Bridgestone President Akira Yeiri asked Mr. Kaizaki to take
the helm at Firestone. Mr. Kaizaki, in the Japanese magazine interview,
said he at first declined. He had no experience in tires. Then, Kanichiro
Ishibashi, former president and son of Bridgestone's founder, told him,
"This is the order of the company," Mr. Kaizaki recalled in the interview.
"Take care of it."
And so, Bridgestone, now one of the biggest foreign owners of a
manufacturing operation in the U.S., dispatched to Ohio an executive
who spoke barely a word of English.
Mr. Kaizaki wasted no time making clear who was boss. He admitted to
his staff that he knew little about tires, but he impressed them by
rolling up his sleeves, according to Bridgestone/Firestone executives. He
reorganized the company and gave each division chief clearer
responsibilities, as well as placards saying, "The Buck Stops Here."
He also laid off employees and cut costs relentlessly. Sunil Kumar, then
in charge of sales at Bridgestone/Firestone, recalls that Mr. Kaizaki once
asked for a tape measure so he could personally check the proportions
of a new building in Nashville. Underlings had said the facility had to be
expanded to accommodate manufacturing equipment. The boss proved
them wrong. There was no expansion, and the company saved millions
of dollars, says Mr. Kumar, who now works in the chemicals industry.
In 1993, for the first time since the acquisition, the
Bridgestone/Firestone unit swung into the black, with a $6 million profit.
That year, Mr. Kaizaki got his reward, the presidency of the parent
company, and returned to Japan to set about belt-tightening there. He
stunned the home office by slashing the company's head count to
12,600 in 1998 from 16,000 five years earlier.
But Bridgestone/Firestone remained a top priority. He continued to try
to boost productivity, in part by targeting the company's labor contract
with the United Rubber Workers union. Mr. Kaizaki later recalled in the
1999 Japanese magazine interview how he was stunned by the
thickness of the manual that spelled out the labor pact, including minute
rules on working hours. "Work that should be done in five hours, they
schedule for eight," he grumbled. "I decided I had to fix that."
The Bridgestone CEO got his first dose of an American-style
public-relations disaster in October 1993, when a worker at a Firestone
plant in Oklahoma City died after his head was crushed in a tire-making
machine. This and another accident drew stinging criticism from
then-U.S. Labor Secretary Robert Reich, who in April 1994 levied a $7.5
million fine against Bridgestone/Firestone for alleged safety violations.
Accompanied by police, Mr. Reich personally arrived at the factory to
deliver the fine notice.
Then in July, about 4,200 United Rubber Workers members went on
strike at five Firestone facilities. Their contract had expired, and the
company had offered them a deal that paid less than one Goodyear Tire
& Rubber Co. had given its workers. Tension soon erupted along ethnic
lines, as picketing American workers carried signs such as "WW II Part II
-- Japan's Bridgestone Attack on American Economy" and "Nuke 'Em."
In an interview at the time, Mr. Kaizaki said Bridgestone was losing $10
million a month at the striking plants, but he refused to budge. "Ending
the strike is not necessary for the company if we are forced to set
working conditions that kill the company," he said.
Mr. Kaizaki stepped up the battle by threatening to permanently replace
the workers who had struck. In January, President Clinton blasted
Bridgestone/Firestone for "flagrantly turning its back on our tradition of
peaceful collective bargaining."
In Japan, meanwhile, Mr. Kaizaki was dealing with the worst recession to
hit the island nation since the oil crises of the 1970s. But by 1998, his
personnel reductions at the parent company had contributed to annual
profits hitting a record $799 million, at a time when many Japanese
manufacturers were suffering huge losses.
The austerity push bred resentment, and among those who felt the
pinch was Masaharu Nonaka, the man who took his life in Mr. Kaizaki's
office. When Mr. Nonaka, a career-long Bridgestone manager, found out
the company was nudging him into early retirement, he wrote a list of
demands, including a revision of the harsh new personnel policies, and
marched in to present them to the company CEO. Mr. Kaizaki refused to
give in, according to Bridgestone, and the confrontation took its bloody
Bridgestone denied forcing Mr. Nonaka to quit, but Mr. Kaizaki drew
criticism from the Japanese press and public for having strayed from its
paternalist tradition. He rode out that storm, too.
Monday, he vowed to bounce back once more, saying, "I believe the way
to take responsibility is to accept the challenge to try again."