Bridgestone 2002 Annual Report Download - page 48

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various jurisdictions’ attorneys’ fees and other monetary payments,
and further agreed to implement a Restitution Program. BFA has
essentially completed the Program, including the payments
involved, with no further provision for it during 2002. BFA also
believes it is in compliance with the other provisions of the settle-
ment.
In November 2002, a plaintiff’s attorney who had filed a pur-
ported class action suit against BFA publicly announced that he
was petitioning the NHTSA to reopen an investigation of BFA’s
Steeltex tires, which it had closed in April 2002, based on informa-
tion allegedly obtained since that closure. The NHTSA stated in
response that it would consider any additional information it
receives. BFA management has thoroughly investigated this issue
and strongly believes at this point that no recall is appropriate or
necessary. Accordingly, BFA has made no provision for any related
contingent liability. Approximately 15.7 million Steeltex tires are
believed to be in service as of December 31, 2002.
Two securities cases filed in January 2001 against BFA and the
Company alleging misrepresentations regarding the quality of the
tires previously under investigation by the NHTSA and violations
of the U.S. Securities Exchange Act were consolidated. In October
2002, a Federal court dismissed these cases. In addition, in
February 2003, a plaintiff’s motion to reopen the Court’s judgment
was denied; however, the plaintiff has filed a notice of appeal. BFA
and the Company intend to vigorously defend themselves and
believe the cases are without merit.
In May 2001, Ford announced a campaign to replace all
Firestone Wilderness AT tires mounted on Ford vehicles, citing a
“loss of confidence” in such tires, but not alleging safety-related
defects in those tires. In the same month, BFA announced, follow-
ing expiration of its current contracts with Ford, it would stop
supplying tires to Ford in the Americas. Ford announced that this
campaign was completed in March 2002. This campaign was not
under the NHTSA’s advice or BFA’s agreement, but based on
Ford’s judgment. Ford has not made any claim to BFA or the
Company for reimbursement of any part of its costs related to this
campaign, although there can be no assurances concerning future
Ford action. In the opinion of BFA and Company management,
based upon the information currently available, the ultimate resolu-
tion of any issues associated with the Ford campaign will not mate-
rially affect the financial position, results of operations or liquidity
of the Company or its Americas operation.
In October 2001, the NHTSA announced an “initial determina-
tion” that a safety-related defect existed in certain additional, non-
recalled Wilderness AT tires which were manufactured before 1998
and which were installed on sport utility vehicles. BFA disagreed
with the agency’s determination, but was willing to replace the tires
in question on a voluntary basis. In order to avoid marketplace con-
fusion, BFA announced that it would also replace, on a customer-
satisfaction basis, that portion of the same tire universe which was
mounted on pickup trucks. BFA estimated that approximately 768
thousand tires were affected by the replacement program, which
was completed in January 2002. As a result of the October 2001
replacement program, the NHTSA closed the investigation begun in
May 2000 of certain Firestone tires.
Several governmental authorities in Venezuela have conducted
investigations of accidents in that country involving Ford Explorers
equipped with Firestone tires, many of which were produced by
BFA’s subsidiary in Venezuela, to determine whether civil fines or
other penalties should be imposed upon either responsible manage-
ment of BFA’s Venezuelan subsidiary and/or Ford of Venezuela, or
upon those companies themselves. These investigations remain
open. The ultimate liability, if any, with respect to the Venezuelan
investigations cannot be specifically ascertained. However, in the
opinion of BFA management, the ultimate disposition of these
investigations will not materially affect the financial position,
results of operations or liquidity of the Company’s Americas
operation.
On March 28, 2003, the shareholders of the Company approved
payment of a cash dividend of ¥8.0 ($0.07) per share, or a total of
¥6,883 million ($57,406 thousand), to shareholders of record as
of December 31, 2002. In addition, a stock option plan was
approved, which provides options to purchase up to 270 thousand
shares of the Company’s common stock by directors and selected
employees of the Company. The exercise price is equal to the higher
of either 1.05 times the monthly average closing market price of
the Company’s common stock traded on the Tokyo Stock Exchange
of the month preceding the date of grant, or the closing market
price of that on the date of grant. The exercise period of the stock
options is from April 1, 2005 to March 31, 2010.
On April 24, 2003, the Company launched ¥50,000 million
($417,014 thousand) unsecured 0.89% Japanese yen bonds and
¥30,000 million ($250,209 thousand) unsecured 0.59% Japanese
yen bonds. The bonds are due May 9, 2013 and May 7, 2010,
respectively. The issue price of the bonds was 100% of the face
value of the bonds.
NOTE 17—SUBSEQUENT EVENTS