Now Akira Yeiri Really Has To Burn RubberTed Holden
Akira Yeiri loves lean, swift management--and loathes obstructions. One detested formality is the hanko, or personal seal, stamped on documents as a sign of approval. When he became president of Japan's huge Bridgestone Corp., some documents had to be reviewed and stamped by 20 executives. "It held everything up," grumbles Yeiri. He cut the maximum number to three and began preaching a philosophy known as genbutsu-genba, aimed at making on-the-spot solutions. "He's obsessed with it," says Nobumichi Takizawa, general manager of a Bridgestone quality-control group.
For Yeiri, 63, it's an obsession that has paid big dividends. Combined with rugged determination and a strong international bent, Yeiri's quick-footed managerial style got him where he is today. Starting nearly 40 years ago as a purchaser in Bridgestone's lone Kyushu factory, he went on to head units in Thailand and Osaka before edging out a rival to become president six years ago. Nowhere was his swift decision-making style more evident than in 1988, when, rushed by a competing offer, Yeiri quickly snapped up giant Firestone Tire & Rubber Co. with a lavish bid that left his rivals stunned.
But now, three years later, it seems that Yeiri may have moved too quickly in acquiring Firestone and too slowly in integrating it with its Japanese parent. While the $2.6 billion takeover has sent Bridgestone's worldwide market share soaring, it has otherwise been a bust (chart). Last year, the Firestone unit--renamed Bridgestone/Firestone (BFS) Inc.--racked up$ 350 million in losses and knocked the parent's earnings down 53%, to $33 million, on sales of $13.2 billion.
The managerial skills and international expertise that whisked Yeiri to the top have been curiously absent in his handling of Firestone. At the outset, Yeiri left most decisions in the hands of Firestone executives and kept directives from Tokyo to a minimum. Company insiders and analysts now say his tendency to delegate duties has resulted in muddled strategies, slow decision-making, and poor communication between Tokyo and BFS headquarters in Akron.
SEVERE DROP. Some former Firestone executives say Bridgestone did not have a cohesive, unified strategy for running the company. Instead of proceeding with a streamlining, as some recommended after the takeover, Yeiri actually added 500 staffers and expanded aggressively. Now, saddled with overcapacity and an
industry slump, BFS is cutting hundreds of white-collar and hourly workers. "Our decision to expand was not a mistake," Yeiri argues. "But it has been more difficult than we expected."
Bridgestone isn't the only tire company with problems these days. World leader Michelin announced sweeping job cuts on Apr. 17, after posting a loss of $970 million in 1990. A severe drop in car production in the U. S. has also set back other major tiremakers such as Goodyear Tire & Rubber Co. And while Bridgestone's sales outside the U. S. have been climbing steadily, Michelin is about to step up its presence in Japan this fall, when it starts manufacturing tires there. Already, imported tires claim 16% of the Japanese market, up from 12% in 1988. Yeiri insists that to compete in this fast-consolidating industry, "buying Firestone was the only choice. It would have taken too long to expand one factory at a time."
The severity of BFS's problems has finally spurred Yeiri to intervene more directly. He recently dispatched a top aide--Executive Vice-President Yoichiro Kaizaki--to Akron to run BFS, replacing Chairman George W. Aucott. Yeiri may pump equity into BFS to ease the company's hefty $3 billion debt. He has already put a synthetic rubber plant on the block and is thinking about shedding more assets, although investment bankers don't expect them to bring much cash. Bridgestone says it's also contemplating further layoffs and production slowdowns.
MULTICULTURAL. Production is not a Yeiri specialty. Uncomfortable with machinery, he never even got a driver's license and often gets his wife to chauffeur him around. But he surely has the right resume for taking Bridgestone overseas. To begin with, he speaks six languages. Through the third grade, he was educated in Chinese schools in Japanese-occupied Manchuria. Back in Japan, he switched from the naval academy after the war to Tokyo University, where he joined a jazz band and played bass at U. S. military clubs.
At Bridgestone, Yeiri formed a foreign book club--he pesters overseas managers to send him new titles on Armand Hammer and Andrei Gromyko, among others. Says former director Norihiro Takeuchi: "He's extremely curious about different cultures." Married to a Japanese woman with German grandparents, he lives in a Spanish-style house outside of Tokyo. They have no children. For a man with many interests, Yeiri's career began prosaically. He started out at Bridgestone in 1953, ordering raw materials and reviewing quality statistics. Soon he moved into sales, retailing tires in a sleepy area just east ef Osaka. Yeiri made his mark in Thailand, where for years Bridgestone had lost market share to Firestone, which had the country's sole foreign-owned tire factory. In 1969, then-country-representative Yeiri persuaded the government to award a second manufacturing license to Bridgestone. There weren't many cars or people on Thailand's steamy back roads, but Yeiri says he did a good business there with smugglers from neighboring Burma. After just one year, he turned a profit in Thailand. Next, Yeiri ran the Osaka office, then moved on to Tokyo and held a variety of managerial jobs before becoming president in 1985.Colleagues portray Yeiri as thoughtful and sensitive--the kind of man who throws surprise birthday parties for friends and has been known to tend personally to employees who have fallen ill while traveling with him. But he does not convey so warm an image to people meeting him for the first time. "He's not a Sony Chairman Akio Morita type, with that magnetic appeal to foreigners," says an adviser who has worked closely with Yeiri. Friends rib him for being forgetful. Twice, director Akio Mino has watched Yeiri squeeze off dozens of snapshots only to discover that he didn't put film in the camera.
When it came time to bid for Firestone, Yeiri was determined not to walk away empty-handed. Initially, the two companies announced that Bridgestone would buy 75% of Firestone's tire operation only. But a surprise bid for the whole company by Italian tiremaker Pirelli forced him to think bigger.
BIG WHEEL? Takeuchi woke Yeiri up with a late-night phone call from Los Angeles to tell him of the bid. Over the next 10 days, Yeiri shuttled between Bridgestone's boardroom and the U. S. Some top executives warned that the buyout would drain Bridgestone of too much talent and money. But Yeiri felt that Bridgestone's shot at becoming the big wheel of the tire business rode on the buyout. Worried about U. S. reaction to the bid, he wanted to end the contest with a direct hit to Pirelli. Acting on a rumor that Pirelli might raise its bid from $58 to $75 per share, Yeiri, after a call to Honorary Chairman Kanichiro Ishibashi, decided on $80.
Yeiri promises BFS will be profitable by the end of 1992, but analysts are wary of optimistic predictions. In December, just weeks before the end of Bridgestone's fiscal year, the company officially predicted earnings at twice the actual level. Most analysts don't see a recovery at BFS until at least 1994.
Despite BFS's problems, the president won't hear a lot of complaining back at the home office. Partly because of a management shakeup in 1989, Yeiri's inner circle now consists of strong supporters of the takeover. And the recent retirement of Bridgestone Chairman Teiji Eguchi has strengthened his position as well. But sorting out the company's internal politics was the easy part. Now he needs a turnaround.