Bridgestone Plans a 25% Cut In Workers at Illinois Factory
                    October 18th, 2000

                    Staff Reporters of THE WALL STREET JOURNAL

                    Bridgestone/Firestone Inc., in a move that highlights the slump in
                    demand for its Firestone brand tires in the wake of a massive recall, said
                    it is laying off about 25% of the hourly work force at its Decatur, Ill.,
                    factory and temporarily curbing production at that location and two

                                         Meanwhile, the death toll from accidents
                                         involving Firestone tires, mounted mainly on
                                         Ford Motor Co.'s Explorer sport-utility vehicle,
                                         has risen to 119 from 101, federal investigators
                                         said. The National Highway Traffic Safety
                    Administration also reported more than 500 injuries stemming from
                    accidents involving the tires, up from 400 a month ago. More than
                    3,500 complaints about the tires have been filed with the agency, which
                    is trying to determine whether Firestone's recall should be broadened.
                    Another 40 or so deaths overseas have been linked to the recalled tires.

                    Firestone had little choice but to curb production, given its falling tire
                    sales, a growing mountain of unsold inventory and the company's
                    weakened reputation following the recall. In order to bolster its finances,
                    the company needed to trim costs by laying off workers and cutting

                    Also to move beyond the crisis, Firestone, a unit of Japan's Bridgestone
                    Corp., must identify what went wrong with the recalled tires and provide
                    a fixable problem, so that consumers have some assurance that the
                    company won't continue to make bad tires. This week, Firestone
                    released a status report from its independent expert, Sanjay Govindjee,
                    an associate professor at the University of California, Berkeley, who was
                    hired by Firestone to pinpoint the cause of the tire failures. Mr.
                    Govindjee expects to submit a preliminary report within a month and a
                    final report by early next year.

                    In his status report to Firestone's head of research and development,
                    Georg Boehm, dated Oct. 12, Mr. Govindjee noted that the problem is
                    associated with a "complex interaction" of tire design, manufacturing
                    and the way the tires perform on the Ford Explorer.

                    Firestone said it will curtail tire production for 28 days between now and
                    year end at plants in LaVergne, Tenn., and Oklahoma City. At its
                    Decatur factory, which produced a large percentage of the recalled tires,
                    Firestone will lay off 450 workers, or about 25% of the total, and halt
                    production for 14 days in December. The moves will curtail roughly 20%
                    of Firestone's total production for the next two months.

                    "I have made a commitment to our employees and our customers to
                    rebuild this organization and the Firestone brand," said John Lampe,
                    newly named as Firestone's chief executive. "In order to keep that
                    promise, this company must be financially strong and viable.''


                    Mr. Lampe said tire inventories have bloated to 50% above normal levels
                    in recent months in anticipation of a possible strike and falling sales. He
                    acknowledged that demand has dropped for Firestone brand tires,
                    though he wouldn't elaborate. Roughly half of the company's sales of
                    passenger and light-truck tires in the U.S. are under the Firestone
                    name, while the rest carry names including Bridgestone, Dayton and
                    private brands.

                    Mr. Lampe also pointed to a shift in the market, with car makers buying
                    more larger-size tires. Firestone said the three plants targeted for
                    cutbacks all produce a disproportionate number of smaller tires. One of
                    the issues in the recent tire recall was whether Ford and other makers
                    of SUVs were using too-small passenger-car tires on what were
                    essentially trucks.

                    Auto makers are turning to larger wheels for their trucks and
                    sport-utility trucks. Ford, for instance, will stop offering 15-inch tires for
                    the new Explorer and will equip all of the 2002-model-year Explorer,
                    going on sale early next year, with 16-inch tires. Mr. Lampe says the
                    production of tires needed for the recall would "continue uninterrupted,"
                    adding that about 4.2 million of the estimated 6.5 million recalled tires
                    still on the road have been replaced. The company expects to complete
                    the recall in November.

                    Mr. Lampe insisted the layoffs in Decatur don't foreshadow a shutdown.
                    But he said the company faces a difficult period as it tries to rebuild its
                    sales and that the recall has brought about charges that will put the
                    company in "a deficit position."

                    In seeking the root cause of the tire failures, Mr. Govindjee found that
                    small cracks develop inside the tires in a narrow strip of rubber known
                    as the belt wedge that runs between the edges of the two steel belts.
                    Over time, these cracks grow and spread through to the entire layer of
                    rubber between the steel belts -- known as the skim layer -- eventually
                    leading to the separation of the tread and the upper steel belt from the
                    rest of the tire.

                    "All evidence to date points to a slowly developing fatigue crack that
                    propagates through the belt wedge material and then subsequently into
                    the belt skim between the steel belts," wrote Mr. Govindjee in his
                    report. Mr. Govindjee didn't return calls seeking comment on his

                    Dick Baumgardner, a tire expert who often testifies against tire makers
                    in lawsuits, said he believes the treads on the recalled tires are too wide
                    and the corners too squared off, both features of tire geometry that
                    would add to the buildup of heat in the belt-edge area. The buildup of
                    heat accelerates the breakdown of rubber.

                    -- Stephen Power contributed to this article.

                    Write to Timothy Aeppel at and Norihiko
                    Shirouzu at