Bridgestone Corp. (5108.TO) said Wednesday it will reshuffle its senior management so it can better cope with the current tough operating environment where the strong yen is eating away its profits and the weak euro is helping its chief rival.

The Tokyo-based tire maker said Senior Vice President Masaaki Tsuya, 59, will assume the post of chief executive officer, succeeding Shoshi Arakawa who will move up to the chairman's post. The company will also appoint Senior Vice President Kazuhisa Nishigai to the newly created position of chief operating officer.

Bridgestone has been battling it out with France's Michelin (ML.FR) for the top spot in global tire sales. The new management structure will have the difficult task of grappling with the yen's strength and higher raw materials costs, both of which are putting a downward pressure on its bottom line.

Despite those two pernicious factors as well as the impact of the March 11 disaster, the Japanese company has still been able to turn in respectable earnings results. Bridgestone racked up a 25% gain in net profit for the fiscal third quarter ended September on the back of solid overseas sales and a price hike to reflect higher input costs.

Michelin, meanwhile, reported a 11% increase in third-quarter revenue thanks to a 9.3% rise in sales volume in expanding markets, and to its aggressive policy of passing on to customers its increased raw materials costs. It also reaffirmed that it expects sales volume to rise by 8% this year, and said it expects "substantially higher" operating profit in 2011 compared with 2010.

Speaking at a press conference to announce the new management lineup, Arakawa said that his primary role will be to advise the CEO and COO on business strategy while the new CEO will take charge of management overall and the COO will contend with more immediate daily operational matters.

"Ultimate responsibility for overall management will lie with the CEO," Arakawa said. But "it is the COO's job to oversee daily operations."

Up until now, Bridgestone's CEO assumed responsibility for both management and operations. But by having the new CEO and COO focus on their respective duties, the company aims to speed up decision making to respond to the drastically changing business environment and to make the process more transparent in order to enhance its governance and compliance.

The new management structure comes as the unfolding scandal at Olympus Corp. (7733.TO) over hiding losses raises concerns over Japan's corporate governance.

But Arakawa said the new management structure has nothing to do with the high-profile corporate fraud. He said the tire maker reviews what management structure is optimal every year and the final decision for this move was made last summer, before the Olympus scandal was unearthed.

"Under this very tough business environment ... we want to make dynamic management reform" as needed, newly appointed CEO Tsuya said.

The change in the positions is subject to approval at the company's shareholders meeting and subsequent board meeting in March.

-By Yoshio Takahashi, Dow Jones Newswires; 813-6269-2791; yoshio.takahashi@dowjones.com

--Hiroyuki Kachi contributed to this article.

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