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Battered Firestone counting on local ties

Clearwater's Morgan Tire, now controlled by Firestone, gives the tire giant an avenue to reach consumers amid the safety frenzy.

[Times photo: Michael Rondou]
Bruce Moore stocks the shelves Thursday at Don Olson Tire & Auto Center at Tyrone Square Mall after a large shipment arrives.

By SCOTT BARANCIK

© St. Petersburg Times,
published August 17, 2001


ST. PETERSBURG -- By all appearances, Don Olson Tire & Auto Center at Tyrone Square Mall is an independent dealer.

Signs outside the store give equal billing to such brands as Michelin, Dayton, Firestone, Perelli, Bridgestone and General. Want a set of Yokohama, Dunlop, BFGoodrich or Continental tires instead? Just ask.

But ask store manager Tony Robilotto's advice and he'll almost always point you to a Bridgestone/Firestone brand first.

Surprising? Not really. Not even with the national uproar over failing Firestone tires on Ford Explorers. After all, Bridgestone/Firestone is Robilotto's boss. Thanks to a deal struck three years ago but kept hidden until last week, Japanese-owned Bridgestone/Firestone now owns 52 percent of Clearwater-based Morgan Tire & Auto Inc., the 558-store chain that includes Don Olson Tire and several other retailers. By 2008, it will own 100 percent. Terms of the deal were not disclosed.

"If a customer wants to have a competitor's brand," said Shu Ishibashi, president of Bridgestone/Firestone's U.S. consumer tire group, "that's okay for me."

After a year marred by congressional hearings, nationwide recalls of certain Firestone models and tales of highway mayhem, sales at Bridgestone/Firestone have plummeted. Some independent dealers, weary of skittish customers, have pushed its tires to the rear of their stores.

Robilotto said he has Firestone tires on both of his cars. But the constant barrage of negative news has caused his friends, neighbors and even his family to question the tires' safety.

"I watch my children watch these news reports. They say, "Daddy, is this true?' " he said. "It's been a rough year."

That's the beauty of the Morgan Tire acquisition for beleaguered Bridgestone/Firestone. Customers at the chain's shops -- soon to be renamed Tires Plus -- may think they're dealing with an independent company, but they're not.

photo
Name that tire
Bridgestone/Firestone Inc. makes tires under these names: Bridgestone, Firestone, Dayton, Seiberling, Road King, Polaris, Peerless, Gillette and Triumph.

Morgan Tire & Auto Center Inc. of Clearwater, which is now majority owned by Bridgestone/Firestone, operates tire dealerships under the following brands in various states:

  • Don Olson: Fla., Nev., S.C., Ga.
  • Hibdon: Okla.
  • Wheel Works: Calif.
  • Michel Tire:Ohio, Ky., Ind., Tenn.
  • Avellino's: Pa., N.J.
  • Tires Plus: Ga., Tenn., Md., Va., Minn., Wis., Ill., Iowa, Neb., S.D., N.D., Kan., Colo., Mo.

Source: Bridgestone/Firestone Inc. and Morgan Tire & Auto Inc.
photo

By and large, customers heed their dealer's advice. Bridgestone/Firestone spokeswoman Christine Karbowiak said research shows roughly 60 percent of tire customers buy the brand and model their dealer suggests. Morgan Tire chief executive Larry Morgan said he expects 75 percent of the chain's tire sales to come from Bridgestone/Firestone's nine brands.

"Every major tire retailer in North America has a major supplier," he said. "In our case, it just happens to be Bridgestone/Firestone."

Together with its nearly 1,600 Firestone Tire and Service Centers, Bridgestone/Firestone's purchase of Morgan Tire makes it the country's No. 1 tire retailer. And that makes for a potent sales machine, even at this unlikely time.

CEO Morgan's 1998 deal with Bridgestone/Firestone was not his first. Firestone hired him out of college in 1965. By age 28, Morgan was overseeing 34 company-owned stores in five states. Next came an 18-year stint at Merchant's Tire & Auto Centers, where he served as CEO.

But Morgan wanted his own company. When former Firestone executive Don Olson decided to sell his 33-store, west-central Florida chain in 1991, Morgan seized the opportunity. A series of acquisitions since has increased Morgan Tire's sales from $30-million to a projected $750-million in 2001, he said. It also lifted the company's ranking among independent tire dealers to second-highest from 16th.

Precisely how the 1998 deal with Bridgestone/Firestone came about is unclear. Ishibashi said Morgan approached first. Morgan, now 57, said the opposite. But both agree on the important details.

Morgan, whose twin children had decided against assuming their father's position, was exploring exit strategies. One possibility included taking the company public. Meanwhile, Bridgestone/Firestone was concerned about losing Morgan Tire's business. Even then, the Clearwater company placed a heavy emphasis on Bridgestone/Firestone products.

"It was a defensive option for us," Ishibashi said.

Three years into a 10-year agreement, Bridgestone/Firestone's ownership of Morgan Tire has surpassed 50 percent. Ishibashi and two colleagues recently took over three of the five seats on its board of directors.

Consumers never might have learned about Morgan Tire's owners. Because Bridgestone/Firestone is a privately held company in the United States, it isn't required to disclose its financial dealings. Privacy also suited CEO Morgan. But the company is beginning an aggressive franchising campaign and federal law requires franchise documents to list shareholders, according to Morgan. Bridgestone/Firestone decided to reveal the arrangement in a news release.

Ishibashi said he does not plan to fold the 1,600 Firestone stores, which are more oriented toward auto repair, into Morgan Tire, which is more tire-oriented. Nor does he plan to buy more independent dealers outright.

But he does plan to pitch the Tires Plus franchise option to about 900 mom-and-pop stores that already favor Bridgestone/Firestone's tires.

"We want to keep them independent," he said.

- Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.

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