Bridgestone President Rejects Report
That Lawsuits Could Close Firestone

A WSJ.COM News Roundup

TOKYO -- Bridgestone Corp. said it would set aside $450 million this year to cover damage claims against its U.S. Firestone unit and flatly rejected a media report that lawsuits over allegedly faulty tires could bankrupt the U.S. subsidiary.

Meanwhile, Firestone and Ford Motor Co. confirmed on Tuesday they reached an undisclosed settlement with the family of a Tennessee woman killed last July in a sport utility vehicle accident.

Trina Thurman Adams was killed when the 1994 Ford Explorer her husband was driving spun out of control, rolled over, and ejected her from the vehicle. The Ford had Firestone tires. The $60-million wrongful death case -- the second lawsuit against the companies -- was scheduled for trial this week in Yazoo County, Miss..

The first lawsuit was in Texas where Ryan Anthony Guillen, 21, and his sister, Kimberly Guillen, 18, sued the tire manufacturer last November after their mother and stepfather were killed in an accident.

About 160 cases from around the U.S., many of them involving allegations of injury or death, have been consolidated in federal court in Indianapolis.

Many of the lawsuits allege that Bridgestone's tire recall was not broad enough to include all defective models.

In August, the tire maker recalled 6.5 million ATX, ATXII and Wilderness AT tires because of problems with tread separation cited in crashes, mostly on Ford Explorers. U.S. regulators say Firestone tires are under investigation in at least 119 deaths in the U.S.

The government is investigating more than 3,500 complaints about the tires. Many of the complaints involve sudden tread separation.

Reacting to a sharp decline in Bridgestone's shares on Tuesday, company president Yoichiro Kaizaki firmly denied a newspaper report that legal claims against Nashville-based Bridgestone/Firestone Inc. may reach $50 billion and force the U.S. company to fold its operations. Shares in Bridgestone fell 14% to 1,252 yen ($11.28), down 200 yen.

Bridgestone/Firestone "is not in a state of insolvency" and has no plans to file for bankruptcy, Mr. Kaizaki said. "We have not even considered such a thing," he said at a news conference in Tokyo.

Mr. Kaizaki said Bridgestone would continue to support Firestone to help it recover from the Aug. 9 recall, but refused to elaborate on how Bridgestone calculated its $450 million estimate for legal damages, saying only that "our accountants and lawyers assure us this will be enough to cover damage awards."

The estimate would bring total costs related to the recall for Bridgestone to $900 million for this year, Mr. Kaizaki said. Bridgestone had already announced that replacing recalled tires with new ones would cost $450 million. Firestone has reserves to easily cover the costs, Mr. Kaizaki said.

In addition to the direct costs, Firestone has suffered from bad publicity surrounding the recall. Last month, Bridgestone said sales of Firestone replacement tires for cars and light trucks fell about 40% in the U.S. in September and October from a year earlier.

The Bridgestone share slide Tuesday in Tokyo was in response to a report in USA Today that with a potential $50 billion in damage claims piling up, lawyers suing Firestone fear the company may file for bankruptcy. The lawyers are attempting to add the company's Japanese parent company, Bridgestone, to their lawsuits, USA Today reported.

Ford and Firestone are preparing to brief U.S. National Highway Traffic Safety Administration officials starting Dec. 11 on their investigations into the root cause of the tire failures. The agency is trying to determine whether Firestone should be forced to broaden its recall, which is now limited to certain Wilderness AT, ATX and ATX II tires. Regulators have said an additional 1.4 million tires of various sizes are dangerous and should be included in the recall, but Firestone disputes that claim.