Business and Finance - Asia

                    Aggressive Bridgestone Slices Ford Relationship

                    By PETER LANDERS and TODD ZAUN
                    Staff Reporters of THE WALL STREET JOURNAL

                    TOKYO -- Japan's Bridgestone Corp., in all but ending its U.S.
                    unit's 95-year-old ties with Ford Motor Co., is attempting to
                    reverse the momentum in a blame game it had been losing
                    over accidents involving its tires.

                    Bridgestone President Shigeo Watanabe said in a news
                    conference that his company's U.S. unit had no choice but to
                    cut its ties with Ford after the Dearborn, Mich., auto maker
                    asked for a recall of 11 million Firestone tires. Mr. Watanabe
                    said such a recall, coming on top of a recall of 6.5 million
                    tires last year, would have been devastating to Bridgestone's
                    U.S. subsidiary, Bridgestone/Firestone Inc. He insisted the
                    tires are safe and said Firestone will leave it to U.S.
                    traffic-safety authorities to decide whether further action is
                    needed.

                    A large-scale second recall "would be a life-or-death matter"
                    for Bridgestone/Firestone, Mr. Watanabe said.

                                         Bridgestone faces great risks in cutting
                                         the company's ties with Ford. The tire
                                         maker's stock price plunged 9.4% to
                                         1,268 yen ($10.33), off 131 yen, on
                                         worries over the impact of the lost
                                         business. On the same day, Moody's
                                         Investors Service Inc. said it might cut
                                         its rating on some of
                                         Bridgestone/Firestone's debt amid
                                         concern that terminating business with
                                         Ford would hurt the tire maker's profit.

                    But analysts said the decision to stop selling tires to Ford
                    might work in Bridgestone's favor. That's because
                    Bridgestone had been losing an increasingly public battle
                    with Ford over which of them was more at fault in the series
                    of crashes that led to last year's massive tire recall.
                    Distancing itself from the U.S. auto maker will allow
                    Bridgestone/Firestone to be more aggressive in making its
                    case that Ford shares some of the blame, the analysts said.

                    The cutoff of ties with Ford applies only to Firestone tires
                    sold for use on new vehicles in North America, Central
                    America and South America. Firestone will continue to provide
                    tires to Ford in Europe and Asia.

                    Mr. Watanabe stressed that he is in close contact with
                    Bridgestone/Firestone Chief Executive John Lampe and
                    agrees with the decision to cut ties with Ford. Mr. Watanabe,
                    speaking in Japanese, used many of the phrases Mr. Lampe
                    had in criticizing Ford. According to Mr. Watanabe, the two
                    men spoke Sunday after Ford started hinting that it would
                    ask for a large new recall of Firestone tires. The men
                    discussed various options and agreed that in the worst-case
                    scenario, Mr. Lampe should sever relations with Ford. "Lampe
                    is the person who ultimately made the decision," said Mr.
                    Watanabe, adding that Bridgestone hadn't considered such a
                    move until Sunday.

                    Since Bridgestone/Firestone is a wholly owned subsidiary of
                    Bridgestone Corp., it would be difficult for the parent to
                    somehow wash its hands of Firestone's problems. Moreover,
                    Bridgestone has invested a great deal of money and
                    management resources in Bridgestone/Firestone since buying
                    the U.S. company in 1988, and Firestone is the linchpin of
                    Bridgestone's global strategy.

                    Last year, Bridgestone/Firestone recalled 6.5 million of its
                    15-inch Wilderness, ATX and ATX II tires that were linked to
                    accidents involving 174 deaths and hundreds more injuries in
                    the U.S. alone, mainly in rollovers of Ford Explorers. Ford has
                    maintained that the problem is solely with the tires, while
                    Bridgestone alleges the design of the Explorer is also partly
                    to blame for the high rate of tire failures.

                    Bridgestone already has set aside $800 million to pay for last
                    year's recall and the expected cost of settling lawsuits
                    involving recalled tires. The larger recall that Ford is
                    demanding would cost Bridgestone as much again or more,
                    analysts said.

                    On the other hand, Bridgestone estimates that losing Ford as
                    a customer will cost the Bridgestone group only about 1.5%
                    of its revenue, or about $239 million. Bridgestone expects to
                    pull in about 1.95 trillion yen ($15.89 billion) in sales this
                    year.

                    Write to Peter Landers at peter.landers@awsj.com and Todd
                    Zaun at todd.zaun@awsj.com