"Right now, [fleet trucking] accounts for around 15% to 20% of our business and it’s a very profitable business," Bridgestone Americas CEO Paolo Ferrari said.
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When you think of high-tech products, the tires on your car are probably not top of mind.
But for Paolo Ferrari, investing in tech is the quickest way to get Bridgestone Americas into the sustainability fast lane
“We are a Japanese global company. Sustainability is now at the top of the agenda for almost everyone but in Japan, it’s been in the DNA for decades,” Ferrari said. “Now, we’re not just applying sustainability to our core products. …Yes, sustainability and safer mobility comes through products, like tires, but also through software and technology.”
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Last week, Ferrari and Bridgestone continued down the road to sustainability by purchasing Azuga Holdings Inc. and its trucking fleet management platform for $391 million.
Azuga’s technology includes GPS tracking, video, driver behavior management and accident reduction tools. The firm has more than 6,000 customers in North America, including commercial fleet customers, insurance companies and government agencies.
The deal came just weeks after Bridgestone made a minority investment in Kodiak Robotics, an autonomous trucking company building a fleet of self-driving trucks that currently operate between Dallas and Houston.
We spoke with Ferrari after the deals were announced to learn why the company is investing in fleet trucking and how Bridgestone sees the future of work.
You took over as CEO in January 2020, what has it been like leading Bridgestone amid a pandemic? If you allow me to put [aside] the tragedy Covid brought about to a lot of people, from a professional and personal point of view, it was a good time to calibrate. From a business point of view, to make some bold decisions structurally, strategically and culturally in the right direction for the company and to be able to accelerate those decisions much faster than in any other conditions. … I don’t think we liked the way we worked before the pandemic. I don’t think we liked the way we worked during the pandemic. Now, I think we’ll get into the perfect stage with a little bit of the past and a little bit of the new, a hybrid, flexible environment. For me, it was also calibration personally, in terms of spending more time with the family, less time traveling and being able to reflect on the new ways working would be coming out of the pandemic.
What is Bridgestone’s work-from-home policy post pandemic? Are you giving employees a set number of days each week to work from home? We’re not giving such strict guidelines. We like the round-a-bout analogy versus the traffic light at an intersection. You give some guidelines but you don’t give specific guidelines. … We encourage the team to come back to work for collaborative sessions or creative sessions, something that just doesn’t work as well online. At the same time, they are free and encouraged to work from home when they are doing individual work. But it will also depend on the [job’s] function and it will depend on the leader.
Total local employment 2021
| Rank | Prior Rank | Name/URL |
|---|---|---|
1 | 1 | Vanderbilt University Medical Center and Monroe Carell Jr. Children's Hospital at Vanderbilt |
2 | 2 | State of Tennessee |
3 | 3 | U.S. Government |
Did Bridgestone’s focus on new technology and move toward more sustainable transportation products begin when you became CEO? I joined Bridgestone five years ago in Europe, [as CEO of Bridgestone EMEA.] The European Union is also quite aggressive in terms of a sustainable roadmap. This vision of combining our products and technology and connecting it to fleet management is something [we] initiated in Europe about three-and-a-half years ago. … That strategy went really well and our new global CEO...made it global. So, in the U.S. and Canada we are accelerating down that same journey. We like the fleet management solutions space because those platforms make us more relevant to our key customers that are fleets. We provide a lot of tires to fleets and … fleet management solutions is a way of giving more insight and solutions to fleet for their own efficiency.
Why was Azuga the right fleet management platform for Bridgestone to purchase? First of all, it’s a company that has a relatively important base, they have more than 200,000 vehicles connected. So, not too big and not too small. Enough for us to access meaningful data from a large number of vehicles. We like the fact they are based in Silicon Valley, so it expands our presence there. They have very interesting solutions around insurance, thanks to the insights they have from vehicle data and the driver’s behavior. They can package risk factors for insurance companies and that’s something we’re very interested in because it promotes safety. And they have a very interesting go-to-market [strategy], especially with mid and small sized fleets. … It’s a segment we are generally underrepresented in and I think we can grow with them.
What percentage of Bridgestone’s business is related to fleet? Our business with fleet has various angles. We’ll sell tires to fleets, we sell solutions to fleets, we service those fleets through our retail network. Right now, all of this accounts for around 15% to 20% of our business and it’s a very profitable business.
How does your investment in Kodiak Robotics fit into these plans? We believe that this ecosystem of mobility will be made, and is made, of platforms. Smart city platforms, potentially, fleet management solutions platforms, connected vehicle platforms, autonomous driving technology platforms and tire platforms. All of these platforms are coming together and we want to make sure that our tire platforms plug into each of them to create value. Also, we want to make sure that we have access to information, for instance from autonomous driving, so we can engineer our products more toward specific segments.
What are the next steps for for Bridgestone in this transition to sustainability and technology? This [purchase of Azuga] was a big step, so I think in the coming months our next steps will be to accelerate the value creation with this company. Making sure that we develop our synergy plans so that we sell more tires into Azuga’s network and that we sell more of Azuga’s solutions into our own network. … We will continue to seed capital into platforms. We bought one in fleet management. We bought a minority stake into an autonomous driving one. We have a couple of others in the pipeline that go in the same direction. …Nobody can tell today exactly how this ecosystem [of platforms] will look at the end stage but it’s important to be in the middle of that conversation.
How close are we to having the majority of trucking fleets be autonomous? You have to look at this in different segments. If we dream about autonomous driving, robo-taxis around New York and London, it’s still going to be a while. But if you think about class-A trucks, big trucks driving autonomously, point-to-point on highways, it’s already happening, and it will only accelerate. Kodiak is already operating between Houston and Dallas.
