The Firestone Tire Controversy

<< Previous

The Controversy

Ford and Firestone seemed to have known about the flaws in the tires for almost a year prior to the recall but it wasn't until NHTSA launched a preliminary investigation that Firestone announced a voluntary recall. Questions were raised about how Ford and Firestone responded to the first evidence of tire problems. Ford officials said that the issue first surfaced in Saudi Arabia, where drivers were prone to deflate their tires for better traction while driving in the desert sand. When they returned to hard pavement, they failed to reinflate the tires and the combination of low pressure and extreme climate led to tire disintegration.

Ford replaced the tires on some 45,000 vehicles in the Middle East and in several other countries with extreme temperatures. Ford and Firestone then studied 63 vehicles in the Southwestern US to see if similar failures occurred but concluded in March 2000 that the tires were fine. However, when NHTSA launched its investigations in May 2000, Firestone officials were at a loss to explain the tire failures. The officials however said that its data showed many of the tires were produced at a factory in Decatur, Illinois plant and that 80% of the incidents occurred in Arizona, California, Florida and Texas. Firestone said there was a correlation between heat and tire problems and also blamed the motorists for not keeping the tires properly inflated. However, that it was Ford Explorer which was affected more than other vehicles. General Motors Corp4, which used the same type of tires on many of its 1999-2001 trucks, said their performance has been "excellent". Ford said that it was affected more because of the sheer volume of Explorers on the road.

But NHTSA officials felt that Explorers were too heavy for the 15-inch tires. However, there was no definitive evidence to indicate that Ford's design specification for Explorer's tires was to blame. But Ford was switching over to 16-inch tires in its redesigned Explorer, which would be launched in 2002. Commented Ralph Hoar, a lawyer representing some of the victims, "There are a lot of smoke and mirrors going on, Ford can say it's Firestone's fault, and Firestone can say it's Ford's fault."⁵

Firestone's Response to the Crisis

Ever since Firestone announced its voluntary recall of Firestone tires in August 2000, its Chief Executive, Yoichiro Kaizaki (Kaizaki) did not make a public appearance. In September 2000, Business Week wrote that Firestone's behavior spoke volumes about the huge gap that existed between the US and the Japanese management. All the Firestone executives in Japan were unwilling to respond to pleas from investors and the media for explanations and reassurance. Said an analyst, "This is a huge crisis, but Bridgestone and Kaizaki are handling it terribly."

In September 2000, Firestone announced that it would offer free inspection of the 1.4 mn tires not covered in the August 2000 recall. Firestone officials said that the tire models identified by NHTSA which were subject to higher than average rates of tread separation would be inspected without charge at the company owned stores and authorized retailers. However, NHTSA recommended that the tires included in the inspection should be recalled as preliminary investigation by NHTSA of some of the tires not included in the recall showed an incidence of tread separation that sometimes exceeded the rate for the recalled tires. But Firestone declined to include the tires in the recall.

John Lampe, Executive vice president, Firestone, said that Firestone would replace any tires found to be unsafe. Said Susan Sizemore, public relations manager at Bridgestone's US headquarters in Nashville, "This is not a recall. It's a customer satisfaction initiative. If necessary, we are replacing those tires with either our tires or a competitor's."

Next >>

---

4] General Motors was the world's largest automobile manufacturer.
5] Business Week, August 28, 2000.