by Jim Smith
Editor, Tire Review

NASHVILLE, TN —

John Lampe, chairman, CEO and president of Bridgestone Americas Holding, who led the company’s remarkable recovery after devastating tire recalls in late 2000 and early 2001, announced today that he is retiring effective Mar. 31. He will be succeeded as chairman and CEO of BAH by Mark Emkes, currently chairman, CEO and president of Bridgestone/Firestone North American Tire (BFNAT).

Lampe announced his retirement this afternoon during a company-wide live Web cast and conference call. In addition, Lampe and Emkes granted Tire Review an exclusive in-depth interview about the retirement and the company’s future plans earlier this morning.

Lampe will remain on BAH board of directors following his retirement, but is also retiring from Bridgestone Corporation’s board of directors effective Mar. 30. Emkes has been nominated for election to the Tokyo-based company’s board, an election for which will be held at the annual shareholders’ meeting in late March 2004.

Bridgestone Americas also announced several management assignments and additions to the company’s Board of Directors. Yuji Tomiyasu, formerly director of Americas and European operations for Bridgestone Corp., has joined BAH as executive vice president and was appointed president and vice chairman of BFNAT effective immediately. He will assume additional duties as vice chairman and president of BAH on Apr. 1.

Effective Feb. 1, Mike Gorey, currently BAH vice president and controller and BFNAT chief financial officer, will become chairman, CEO and president of BFS Diversified Products, the subsidiary that operates BAH’s non-tire businesses. Gorey succeeds Lampe, who has held those offices since 2003. Gorey will also become an executive vice president of BAH effective Feb. 1. Tomiyasu and Gorey were today elected to the BAH Board of Directors. Hiroshi Kanai, Bridgestone Corp.’s executive vice president and CFO, was also elected to the BAH board.

“Leading a 50,000 member family through difficult times has been an awesome responsibility, but it has also been a tremendous honor and privilege,” Lampe told BAH employees during this afternoon’s Web cast. “I am excited and gratified by the progress we have made in reinvigorating our company and in rebuilding the Firestone brand. And as our company continues its recovery, I believe that it must be led by an individual who is strong, energetic, enthusiastic, assertive and confident.

“While I like to think that I’ve exhibited those characteristics in the past, I am not sure how much of my reserve is left for the future. I believe it is time for a change – and this is an instance of my head over-ruling my heart. While my heart is telling me that I can stay, my head is telling me it is time for a fresh set of eyes, a new perspective and increased energy levels.”

During his remarks, Lampe praised the choice of his successor. “I am extremely happy to announce that Bridgestone Corp. has chosen Mark Emkes to succeed me as chairman and CEO of Bridgestone Americas Holding. I have known Mark for more than 25 years and he is the right person at the right time for the job. It is one of our company’s strengths that we can promote from within.

“While Mark and his team have made great progress at BFNAT, they still have a ways to go to make our tire business globally competitive and profitable,” Lampe said. “For that reason, Mark will continue as chairman and CEO of that company concurrent with his responsibilities at BAH.”

In a letter to the BAH Board of Directors announcing Lampe’s retirement, Shigeo Watanabe, chairman, CEO and president of Bridgestone Corporation, thanked Lampe “for his tremendous efforts on behalf of Bridgestone Americas. It is through John’s leadership that Bridgestone Americas has been placed squarely on the road to a remarkable recovery, a recovery that is the clear result of John’s vision. John’s success, and the success that Bridgestone Americas has enjoyed, can also be traced directly to the trust that his associates, customers and dealers have placed in him, a trust that he has earned during his 30 years with the company. John’s vision for ‘Making it Right’ and his belief in treating his associates and business partners with dignity and respect will be his legacy here at Bridgestone Americas, a legacy that we will all respect and cherish.”

Responding to Lampe’s comments, Emkes thanked him for his support and said he was “excited and thrilled to be given the opportunity to lead the best organization in the tire and rubber business. While there is still a long way to go in our company’s recovery plan, our team, under John’s leadership, has laid the groundwork, the basis, for solid business growth in the future.”

Our exclusive interview with John Lampe and Mark Emkes:

Tire Review: Why are you retiring at this time, and what led you to this decision?

John Lampe: I think it’s the right time both for myself personally and for my family, and it’s the right time for the company. The last three years have been, shall we say, interesting and difficult. I made some commitments to my wife and my family when I took the job that I would do this for a certain amount of time. And I’ve got so many things I love to do. I’ve got kids – one in New York and Chicago – that I never get to see, and I just want to have time while I still have my health to do the things I enjoy doing. The company has recovered so significantly and we’ve got such a great team in place here, with Mark’s 25 years, he’s very knowledgeable and knows the company as well as I do, it’s just a good time.

TR: Mark, you were selected to be the chairman and CEO of Bridgestone Americas Holding. What other changes will be made?

Mark Emkes: I will be chairman and CEO of the Bridgestone Americas as well as chairman and CEO of Bridgestone/Firestone North American Tire. And then Yuji Tomiyasu, who is a dear friend we’ve known for over 10 years and has recently been in Japan overlooking the Americas and European operation, will be named president of Bridgestone/Firestone North America Tire, effective today. On Apr. 1, when I take over Bridgestone Americas’ duties, he will also be named president and vice chairman of Bridgestone Americas, as well.

TR: Transition-wise, was your retirement something that was planned?

Lampe: Not really. When I took the job I talked with my family about how long I would be able to do it and how long they would be able to put up with me doing it. This is not a quick decision. It’s not one that I just made in the last 30 days. It was made well in advance. We’ve had long conversations on how best to do the transition, and what the timing would be. And Bridgestone management has been very supportive, so we’ve had a lot of time to put everything in place that we needed to make this thing work really smooth.

Emkes: And the other good thing, with John’s management style, I had a chance to run a lot of the Americas operations. And for the past year and couple of months, I’ve been running North America Tire, which is our biggest operation here in the Americas. So John has given me a chance over the last several months to be exposed to pretty much the entire business.

TR: In terms of management style, Mark, are you going to continue the path that has been established? What can we expect to see from Mark Emkes?

Emkes: My goal is to build on the foundation that John has built and allow the company to evolve and become a premier business enterprise. I think a lot of people think of us as a tire company, and we are – that is our major focus, – but we have 2,200 great retail stores, a great asset here in the U.S., and we have a diversified products company, both of which are profitable, good businesses, and, I think, positioned for additional excellent growth. Our North American tire business is still not profitable, and while we’re making great progress, we still need to put a big focus on that piece of the business. But, overall, John has put us in a position where Bridgestone Americas is making money, and we just need to build on that foundation.

TR: John, looking back on the tire recall, and all of the subsequent issues, did you truly believe the company would be able to pull through? Did you have any thoughts that Bridgestone Americas wouldn’t survive, and when did you know that everything would work out?

Lampe: We just never lost our hope. It was difficult. We all – including our dealers and our parent company – went through a really difficult time. We refer to it as our darkest days. But we never lost hope. And everyday, we come to work and see the loyalty of our associates. They never gave up. You get calls from dealers and e-mails that support you and say they’re not going to leave us. You’ve got your parent company sending the best people over, and giving us the assistance. We just never lost hope because we have all this support around us. I will never forget the contribution that our employees, our customers and our parent corporation made. Without them being fully committed, we would have had a much more difficult time. But now that we’ve made a significant turnaround. We’re not where we want to be, but we’re a hell of a lot better than where we were. We’re just focused on the future, and I think this company has a tremendous future.

TR: You have downplayed, perhaps, how bad things were in the midst of all the recall issues. Give us a sense of just how bad things really were, to the degree you can.

Lampe: Starting in late 2000, obviously the demand for our products fell off with what was going on in the media and so forth. We recognized very quickly that we had to adjust our supply, and put our production in line with the decreased demand. We had massive layoffs in some of our plants and then we closed Decatur. You know, it doesn’t get any worse than that. When you have to close a facility and affect the lives of 1,700 families, and the community, it doesn’t get much worse than that. But again, the support we received and the encouragement we got from our parent company and our dealers, we were able to go on. We had a tremendous loss in 2001 – $1.7 billion. That’s also obviously very difficult financially. But then we came back in 2002 and made a profit. It’s probably the hardest thing a company can go through. I can’t imagine a more difficult situation for any company. But nobody lost hope, everybody always supported getting us turned around, and it was because of this support that we’ve been able to do that.

TR: You are a humble guy and you’ve been humble through your term as president and chairman of the company. But, can you share with us what you think is your greatest contribution to Bridgestone Americas’ resurrection?

Lampe: I don’t know that there’s any one thing I can say was my greatest contribution. I was very fortunate to have a lot of great people beside me and around me when I took the job. I can never talk enough about the quality of our relationship with our dealers. You know as well as I do that most of our dealers are multi-brand. They could have sold somebody else’s product, but they didn’t. They stuck with us. They believed in us. They supported us. And the parent company was just amazing with the faith that they put in us. So, I don’t know if I can say it’s an accomplishment, but one of the greatest things that I’ll never forget is the support I got from everybody around me on this thing. It was just amazing. Mark has said that managers don’t win games, the players do, and it was our players who won the game.

Emkes: You’re right, he’s very humble. It was his leadership and the relationships he has developed over the years. Those relationships exist because of the respect that he shows to, not only our customers but to our team members here within the organization. So, he gets respect because he gives respect.

TR: We’ve talked, and you have talked, about how hard things have been over the last three years. But, share with us a little bit of what some of the best parts of the last three-plus years have been.

Lampe: I think going to meetings where we had our independent dealers, and things where a number of dealers were there. Just the amount of support and the amount of encouragement that they would give us. You know, statements like, ‘We’re going to sell your product even more than we did before. We’re not going to let people leave our store without buying one of your products.’ Those are the kind of statements that just made you want to come to work and fight your way through this thing. So, certainly, some of the highlights of my last three years has been the attitude that I’ve seen from our teammates here, our associates, and from our dealers, and from our parent company. I think the honor that the parent company bestowed on me in making me the first non-Japanese and first American to be elected to the Bridgestone board of directors was a huge honor, and one that I’ll never forget.

TR: Are you satisfied with the position Bridgestone Americas and Bridgestone/Firestone North American Tire are in right now and do you feel that all of the safeguards are in place to prevent another devastating recall or other significant problem?

Lampe: Let’s divide that into two parts: the state of the company and then we’ll talk about the safeguards and so forth. Am I satisfied? No. The fact that we made $80-plus million in 2002 is gratifying. It’s obviously a huge turnaround, but it’s nowhere near where an $8 billion company should be, so we’ve got some work to do. Mark mentioned North American Tire, and we’re still struggling there. We’ve made tremendous progress under Mark’s leadership. We are so much better positioned today than we were two years ago, and I have no doubt that we’ll get back to where we want it to be. But we’ve got a lot of room to grow and a lot of things to do. From a safeguard standpoint, I am very comfortable with what we’ve done. We’ve worked extremely hard with our early warning system. We are now able to detect issues and get them resolved before they become problems. We have no issues at all complying with the TREAD Act reporting requirements. We were well positioned to be able to do that, to turn the switch on and do that from day one. And we continue to do kaizan activities in our plants, improving our processes and quality and performance, so I’m just extremely confident that this company has never been better positioned to go forward successfully than we are today. Mark has made substantial re-organizational changes in North American Tire that give our people with more responsibility and more accountability, and we’re already seeing the dividends of that. As Mark mentioned before, our Latin American operations, our diversified products operations, and our retail operations have had a spectacular 2003 and will continue to dominate their individual markets in 2004.

TR: What things do you feel you’ve left unfinished? Is there any one thing or any group of things that you regret that didn’t get accomplished while you were leading Bridgestone Americas?

Lampe: Well, I would have liked to have been more successful in the North American Tire part of our business. I tried to run that before I brought Mark in and struggled somewhat with everything else that was going on. Mark certainly picked up the reigns and has made tremendous progress. I would have liked to have left at a time when we were making money in our tire business. We are in the middle of our union negotiations, and I am very disappointed that we weren’t able to get those concluded during my tenure here and during 2003, and I hope that Mark will be successful in bringing those to a good conclusion for both our teammates and ourselves.

TR: Mark, what issues do you see near term, or even long term, that Bridgestone Americas and specifically North American Tire face, things that need to be done, and how do you intend to pursue those?

Emkes: I think one of the major issues is the union negotiations that are still in front of us. I think we need to understand that we are all in the same family; we are all in the same boat. And we need to find a way to make sure that we can competitively produce tires in North America, which will be in the benefit of all of our team members. So, we’re ready to get back to the table and find a way together, to work together, and guarantee the future of the company here in North America. It needs to be through negotiations, it needs to be through serious discussions, and it needs to be a discussion about being competitive here in North America.

TR: Mark, what can we expect to see from Mark Emkes as the head of arguably the largest tire company in North America?

Emkes: Well, I have very simple working concepts because I’ve noticed that in the sports world, the coaches that teach the basics usually are the ones that are successful. What we will be doing here, going forward, is continue to work on the foundation and build on the foundation that John built. We have distractions during the course of the day, but we need to make sure we continue to focus on improving the customer, teammate, government and community relations while at the same time improving our processes, systems and quality. Those really are the things that we have out in front of us on a daily basis, and we do that by respecting the people, treating customers as partners, constantly visualizing success, planning well and then implementing. I think where some companies get distracted is everyone has a plan, but oftentimes those plans are so complex that the board of directors walks out, giving themselves high fives, but when it comes to implementing, the plans are so complicated that they can’t be implemented. So, planning well means making a plan that is clear, that everyone understands, so that when it comes to implementation, it will be easily implemented. That’s pretty simple, and that seems to have worked so far everywhere I have been.

TR: Mark, what do you see in terms of opportunities for Bridgestone Americas as a whole – business opportunities, growth opportunities, anything specific?

Emkes: We have great momentum going, I would say, on all sides of our business – consumer replacement side, the truck-bus radial side, OTR, ag. We have very strong marketshares in those areas. We have new products coming out in those segments. And, in our consumer replacement business, we’re now addressing the tuner market with our new Fuxion brand. We’re excited with regards to the opportunities that are out there, and we’re addressing them, to a large extent, with new products. And we’re going to continue to build on the relationships that people like John and John Gamauf have established over the years.

TR: In terms of the industry as a whole, what do you feel the tire industry has not done properly or completely to address some of the issues raised by the recalls?

Lampe: It’s kind of hard to speak for the entire industry. I know that we have done a lot of things to react to the TREAD Act requirements and NTSHA’s requirements. We talked about the early warning. We talked about the testing. We’ve done a tremendous amount of work. I believe the other members of our industry have done the same thing. I think we’re all in a position to comply fully with those requirements and even surpass some of those. I think the industry still needs to continue to push the value of our products, the sophistication of our products and what we should expect to receive in return for these high-quality, sophisticated products. The second thing is consumer education on maintenance and air pressure. I think we need to continue to do that – get people aware that tires are very important but that they need to be maintained.

Emkes: I’ll reinforce what John said on air pressure to the point where we are going to be focusing very strongly on that going into 2004. You know, if you don’t put oil in a car, it won’t go too far. I think some people – a lot of people – don’t realize the importance of air in the tire. So, we’re going to be putting a lot more focus on that.

TR: John, you are still a pretty young guy. What are you going to do now with your free time?

Lampe: Well, my health’s good, and that’s one of the reasons I decided to retire now when I was still healthy and was able to smell the proverbial roses. There are a lot of things I like to do that I just don’t get time to do. I would love to play golf more. I am not a good golfer because I don’t play at all. I would love to play more often, get consistent. I love to fish, I love to travel. We live on a lake and love to boat. I love to play bridge. My wife plays bridge three or four times a week and I play three or four times a year. I would like, certainly, to do more of that. I just am very comfortable that I am going to be very busy and very happy after Mar. 31.

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