In this Q&A, Bridgestone Corp. elaborates on how it rose to the Covid-19 challenge and made a strategic reconfiguration amid the pandemic:
Q How would you describe business thus far in 2020?
Bridgestone: There was significant stagnancy in global economic activity due to state of emergency declarations in countries worldwide because of Covid-19.
Therefore, first quarter results were difficult due to drops in demand for OE and REP tires stemming from global reductions in automobile production and lower operating ratios of passenger and commercial vehicles and certain mining vehicles.
ERJ: What are some of the key changes the company has made in response to the Covid-19 crisis?
Bridgestone: Bridgestone’s policies in response to Covid-19 are as follows.
1. Crisis response measures prioritising lives and safety of customers, employees, and other stakeholders
- Entrenchment of responsible actions by employees to respond to social expectations and prevent spread of disease
- Swift, organisation-wide response to state of pandemic in relative countries (teleworking, temporary plant shutdowns, etc)
- Social contribution activities such as Surgical mask production, healthcare facility etc.
2. Minimisation of business losses in response to operating environment deterioration
- Optimal production control based on projected demand declines
- Bolstering of cash flows from a cash-oriented perspective
- Review of costs and investment plans out of consideration for operating environment volatility
3. Resolutions of fundamental issues and reinforcement of management constitution through drastic reforms in face of crisis
- Organisation-wide initiative for strengthening operations by improving productivity from new perspectives such as workstyle reforms
- Formulation of mid- long term strategies under new management team and through review of resource allocation priorities from global and local perspectives to accelerate strategies amid rapid social and economic change
ERJ: What positives have you seen at your company and in the wider tire industry over recent months?
Bridgestone: We built our business strategy from the perspective of the business environment both inside and outside our company.
Even after Covid-19, our directions remains same but need to adopt the acceleration of the change of speed.
ERJ:There are signs of a continuing trend towards protectionism with measures such as calls in the US for antidumping duties on certain tire imports. What is your company's viewpoint?
Bridgestone: The impact of protectionism is limited because the principle is local production for local consumption.
We will continue to monitor the situation and review the supply chain as appropriate.
ERJ:What kind of trends are you seeing in the marketplace and how have your company adjusted its product portfolio in response?
Bridgestone: The world of MaaS/CASE, especially shared and Connected, will have a big impact on our business.
- Shared: Although there are various short-term views after the Covid-19 crisis, but from the perspective of sustainability and economic rationality, we assume that the shift “from Owning to Sharing” will continue in the medium to long term.
In “Shared”, we assume that the sustainable business model will become mainstream, and passenger cars will also shift to B2B business. Our group is originally strong in B2B business. We are already ahead in the solution business model in commercial businesses such as truck business, mining business, airplane business and agricultural business. We will expand it to consumer business in the future.
- Connected: “Connected” includes mobility systems from urban development to smart city support, and we will contribute to the whole system. While everything will be connected to the car, we will promote DX in “real” and “digital”, to provide value by connecting with tires. We will create new added value by connecting systems with the Bridgestone T&D PaaS platform. This is the major strategic direction of us.