The Firestone Tire Controversy

In May 2000, the field Highway Traffic Safety validation (NHTSA) in the United States issued a earn to the ford Motor Co. and Firest peerless Inc. asking for randomness round the broad(prenominal) incidence of glance everywhere failures on the intersection venturer run around Utility Vehicles (SUVs). During July, traverse analyzed the data on wipe out failures. The abridgment revealed that Firestone radial travail 15 inch ATX and ATX II tires produced in North America and Wilderness AT tires produced at Decatur, Illinois Plant had very high failure rates with the treads peeling off.When the tires failed, the vehicle often rolled over and killed the occupants. Firestone amid concerns over tread separation, accidents, injury and finis inform a voluntary rec alone of all Radial ATX and ATX II and Wilderness AT tires. Around 6. 5 jillion tires were called. These tires were master key equipment on certain cover explorer SUVs, Mercury Mountaineer, Ford Ranger pluc k up trucks and Mazda Navajo and B-series pick up trucks. The Firestone tire recall was perhaps the biggest auto prophylactic crisis in the US history.NHTSA put the death figure in February 2001 at 174 which has lift from 101 deaths reported in family line 2000. However, analysts felt that there were as galore(postnominal) as 250 deaths and more than 3000 injuries associated with the defective tires. most of the deaths occurred in accidents involving the Ford adventurer and the victims and their families filed hundreds of lawsuits. In May 2001, Firestone announced that it was severing its ties with Ford and alleged that the problems in the Ford venturer caused 174 deaths.Firestone alleged that Ford was trying to sport attention from the problems with Explorer. Ford and Firestone seemed to halt know about the flaws in the tires for almost a social class prior to the recall further it wasnt until NHTSA launched a preliminary investigation that Firestone announced a voluntary recall. Questions were raised about how Ford and Firestone responded to the beginning(a) evidence of tire problems. Ford ex officios state that the issue first surfaced in Saudi Arabia, where drivers were prone to deflate their tires for better traction while madcap in the desert sand.When they returned to hard pavement, they failed to reinflate the tires and the confederacy of low pressure and constitutional clime led to tire disintegration. Ford replaced the tires on close to 45,000 vehicles in the Middle einsteinium and in several other countries with extreme temperatures. NHTSA officials felt that Explorers were too heavy for the 15-inch tires. However, there was no definitive evidence to render that Fords design specification for Explorers tires was to blame.A lawyer representing some of the victims said, There are a piling of smoke and mirrors going on, Ford peck say its Firestones fault, and Firestone can say its Fords fault. 5 John Lampe, Executive vice presiden t, Firestone, said that Firestone would replace any tires found to be unsafe. Susan Sizemore, public relations manager at Bridgestones US headquarters in capital of Tennessee said, This is not a recall. Its a customer satisfaction initiative. If necessary, we are replacing those tires with both our tires or a competitors. Firestone alleged that Ford Explorer without Firestone tires were still experiencing rollover problems. Officials conceded that some of the Firestone tires conglomerate in the recall were apparently land class tires and did not appear to have safety problems exactly said the tires undeniable to be included in the recall because of loss of customer confidence in the Firestone tires. The committee investigating the case subsequently hearing from both sides said that there was a need for further analysis by an in searchent source such(prenominal) as NHTSA about both the Explorer and the tires.In 2001, Firestone announced that it would shut down one of its US pl ants, which could be its Decatur, Illinois, plant by no later than December 31, 2001. This would make headway some 1, 500 jobs. Bridgestone recorded a net loss of $ 250. 3 million for the first half of 2001 because of the tire recall. In the first half of 2000, Bridgestone recorded a net profit of 18. 90 zillion yen. An extraordinary loss of $ 570 million taken by Firestone in June 2001 to pay lawsuits and clear up other costs tie in to the tire recall was the main causa behind the loss.Company sourced said that they would try to revive their North American operations by shifting focus to the Bridgestone provoker. Shigeo Watanabe, president of Bridgestone said, I dont think the Firestone brand will disappear, but the Bridgestone brand will grow. The recall of 6. 5 million Firestone tires on the Ford Explorer in August 2000 cost Ford about $ 500 million. Explorer sales had plunged 21% in 2001. The companys earnings were judge to sink by 65% in 2001. Fords share of the US a utomobile market place had fallen by 1. 7 dowry points in 2001 to 23. 1%.Officials at Ford felt that the future of Ford (Explorer) would depend on how customers responded to Fords reaction to the crisis. One official said, My message to consumers is, if you dont think we have behaved in the way the worlds leading consumer company should behave, and then tell us, because we want to earn that verity and respect. 7 Commenting on Fords future kind with Firestone, that official said, Given the importance of the family between tires and vehicle safety, and the importance of brand perception, how can you put Firestone tires on the sassy Explorer that comes out next year?