Bridgestone enters power saving mode

Japanese Bridgestone plans to cut costs by 65 billion yen ($460 million) this year, and half of this amount has already been saved in the first half of the year, according to the company's report.

To achieve its goals, Bridgestone intends to improve the balance between sales and production volumes, reduce fixed expenses, and implement lean inventory management. Additionally, due to increased competition from Asian suppliers, the production of truck tires will be reduced. In Europe, tires of this type are produced at plants in Stargard (Poland) and Bilbao (Spain), and these enterprises will be decommissioning equipment and changing shift schedules.

Bridgestone will also reduce the production of semi-finished products for tire manufacturing and decrease its investment expenses. It is reported that the reduction in total investment volumes will occur in both the second half of 2024 and in 2025.

Another task is to reduce inventory volumes, and in the truck tire segment, it is planned to reduce them to 70% of the previous year's level by the end of the year. Passenger car tire inventories will be reduced by 16%, and Bridgestone also intends to reduce its logistics expenses, including by supplying products directly from factories to customers without the involvement of third parties.

It is also planned to reduce other types of costs, for example, by installing solar panels for electricity generation and increasing the automation of warehouse complexes. In addition, a centralized raw material procurement system will be created, which should also reduce the tire manufacturer's expenses.

According to the results of the first half of 2024, Bridgestone increased its revenue by 3.6% (to $14.8 billion) compared to the same period last year, however, operating profit decreased from $1.62 billion to $1.56 billion. As noted in the company, the decline in profit was due, in particular, to the deterioration of indicators in North America, as well as the overall reduction in sales of truck and passenger car tires in physical terms in the global market.