John T. Lampe is an unlikely pitchman. The chief executive of Bridgestone/Firestone Inc. (BRDCY) isn't known for his bombast or dynamism, and he rarely raises his voice. But the embattled tiremaker needed someone to face American consumers in a new advertising campaign aimed at restoring confidence in the company. So the 53-year-old Lampe reluctantly agreed to be the front man for the only employer he has ever known. "It wasn't my lifelong ambition to be on TV," he says. "But consumers want to hear from someone who is accountable."
Indeed they do. Over the past nine months, Firestone has recalled 6.5 million tires from Ford Explorers after some tires shredded on the highway, leading to rollovers that the National Highway Traffic Safety Administration says killed 174 people and injured 700 more. Lampe has ordered Firestone's Decatur (Ill.) plant, where most of the defective tires were made, to change its manufacturing process and has spent $50 million to upgrade several different facilities.
But the company's reputation remains seriously damaged. Total Research Corp., a market researcher in Princeton, N.J., surveyed consumers about the reliability of various brands in March, and they gave Firestone a rating of less than 4 on a scale of 0 to 10--a 40% drop from the previous year. "It was one of the worst reactions we've ever seen," says analyst Douglas Berdie. Plus, the $754 million recall and ongoing litigation pushed Bridgestone/Firestone's North American business $510 million into the red last year on sales of $7.5 billion. The company expects a $200 million loss for this year.
Lampe, a straight-talking Kansan, has the unenviable job of resurrecting the century-old tire brand, boosting sales, and getting the company back in the black. He says he hardly slept when the recall began in early August and he was the point man. Now, though, he's easing out of crisis mode. "We've had challenges before, and we've turned it around," Lampe says. "We'll have to do it again."
To monitor tire production more closely, he dispensed with several layers of bureaucracy. Now, all quality engineers report to a new vice-president, who reports directly to Lampe. Plus, the company is offering extended warranties of up to four years on its tires and a 30-day test drive--including refunds for dissatisfied buyers. "No one else is offering that," he says.
PREMIUM PUSH. Lampe also needs to expand the top-line Bridgestone brand to make up for Firestone's losses. Right now, Bridgestone is known mostly for premium and commercial-truck tires. Lampe plans to push Bridgestone further into the consumer replacement-tire market and hopes to sell more tires to auto makers. He is negotiating with DaimlerChrysler (DCX) to equip some of its U.S. vehicles with Bridgestone or Firestone tires.
But until Firestone has improved the quality of its tires and established a safety record that auto makers and consumers can rely on, it will be a hard sell. That's especially true since Firestone competitors Michelin and Goodyear (GT) offer very good tires and have strong reputations. Indeed, the Firestone brand may well be beyond repair. "My advice would be to keep making tires and call them something else," says John Bissell, a consultant at marketing firm Gunderson Partners in Bloomfield Hills, Mich.
It was the parent company, Bridgestone Corp., based in Tokyo, that took the initial step to salvage Firestone: In October, the board of directors appointed Lampe, the first American to run the subsidiary since Bridgestone bought Firestone in 1988. He was an obvious choice. As a top marketing executive in the 1990s, Lampe helped bring about Firestone's resurgence after a 1978 tire recall had pushed the company into a decade-long slump. In 2000, Firestone sold 50 million tires--more than twice as many as it did in 1992--which represented 21% of the U.S. tire market. And in the early days of the fiasco last fall, Lampe, then executive vice-president, made a much better impression during congressional hearings than then CEO Masatoshi Ono, whose defense of Firestone lost something in translation. When Lampe took over, one of his first acts was to publicly apologize to the families of those who died in the crashes. "Lampe is a good diplomat for us," says Shigeo Watanabe, Bridgestone's new president and CEO.
SHARED RESPONSIBILITY. Lampe hasn't been diplomatic when it comes to Ford Motor Co. Since the recall began, Ford has placed all of the blame for the Explorer rollovers on Firestone. After Lampe's testimony, in which he stated that Ford had made its new Explorers too heavy to drive safely at the tire air pressure it recommended, many people started asking whether the design of the Explorer also contributed to the crashes. "He went after Ford relentlessly," says Joan Claybrook, executive director of Public Citizen, a public advocacy group. "That took some guts. Very few suppliers go after the auto companies." Ford still buys one-third of its tires from Firestone and remains its biggest customer, but the auto maker is doing less business with Firestone these days. Lampe won't say how much less.
Even though Ford still offers Firestones on its all-new 2002 Explorer, dealers say most buyers are asking for Michelin or Goodyear tires instead. So far this year, Firestone sales are down 22%, and Lampe says the company won't turn a profit until next year. Worse, even as Lampe tries to restore Firestone's reputation, the number of lawsuits against the company is likely to grow, and the government may demand another recall. Lampe concedes that "rebuilding the Firestone brand will take a couple of years."
He took a chance in accepting the job, and by becoming the face of Firestone, Lampe has raised the stakes. In the ad campaign, which will air for the next several months, he promises that Firestone has rooted out quality glitches and that its tires are safe. "Not everyone remembers CEOs of companies in turnaround times," says Allen P. Adamson, a managing director at Landor New York, a corporate-identity firm. "But they'll remember you if you put your name out in a public way."
The CEO job is so demanding that Lampe almost didn't take it. Last fall, he stood in front of the Nashville headquarters with Firestone Div. General Counsel Dan Adomitis and wondered aloud if moving up was a smart idea. "He knew how much time it would take away from him and his family," Adomitis says. Lampe spent several days discussing the prospect with his wife, Barbara, whom he met in Germany while on military duty in the early 1970s. Both understood how stressful it would be.
But Lampe is a company man who has the survivor mentality of Firestone lifers. Besides the 1978 recall of 14.5 million tires, there was a tough labor strike when Lampe ran Firestone's Dayton Tire division in Oklahoma City. That strike was the longest in the history of the industry, lasting two years, beginning in 1994. Labor Secretary Robert B. Reich even flew into town to show support for the union. To keep production going in the early days, office workers manned the plant. Lampe himself spent 12 hours a day in the warehouse moving tires to meet orders, Adomitis recalls. And Lampe feels a loyalty that comes from growing up in a company. He once cut a salesperson a personal check for several hundred dollars when the company couldn't come through with a promised bonus, says Frank R. Doman, vice-president for human resources. Today, Lampe often walks the floor, talking easily with rank-and-file workers. "Lampe knows a lot of the employees by first name," says 45-year veteran administrator Bernice Csaszar.
So Lampe has his staff behind him, and at the very least, he has tire dealers in his corner. He won them over with cash, reimbursing them for all costs associated with the recall and making sure none of them lost money replacing failed tires. "Firestone has no problem with the dealers," says Richard Johnson, president and CEO of Heafner Tire Group Inc., a Charlotte (N.C.) distributor. "Their problem is with the consumer." That's a problem Lampe has put himself on the line to solve. By David Welch in Nashville