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Ford VS. Firestone

Ford VS. Firestone. MMS Chapter 23. The Problem. 200 deaths in the US due to cars rolling over 60 deaths in Venezuela 14 deaths in Saudia Arabia Tread separation a possible cause of the cars torolling over. From the Beginning. Partners dating back to 1895

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Ford VS. Firestone

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  1. Ford VS. Firestone MMS Chapter 23

  2. The Problem • 200 deaths in the US due to cars rolling over • 60 deaths in Venezuela • 14 deaths in Saudia Arabia • Tread separation a possible cause of the cars torolling over

  3. From the Beginning • Partners dating back to 1895 • First contract established in 1906 • Martha Firestone, Harvey’s granddaughter, married William Clay Ford, Henry Ford’s grandson

  4. The Blame Game - Firestone • In 2001, Firestone issued a report blaming the Explores design for all of the accidents • Any tread separation would have caused the accident • The tread separation claims occurred ten times more frequently on Ford’s Explorer than on Ford’s Ranger, a pickup

  5. The Blame Game - Ford • In 2001, Ford gave the NHTSA a report blaming Firestone for manufacturing flaws • The Explorer had ranked among the top in terms of safety among the 12 SUVs tested for 10 years • For the much of the time the Explorer ranked high in safety, Goodyear tires were used • Rangers are taken on long distance trip where the tires could get too hot

  6. Who is at Fault? • Ford recommended a low inflation level for the tires, which causes greater heat build up • Ford chose to use grade C Firestone tires instead of more heat resistant tires such as grade B • Firestone had been linked to tire failure, most manufactured from a plant in Illinois

  7. Drivers at Fault? • Not being aware of their tires inflation levels • Driving too fast over long periods of time • Not knowing how to handle tire blowouts

  8. The Consequences • Ford reported it would triple its initial recall, costing over $2.8 billion • In 2001, Ford Explorer sales decreased dramatically • Ford reported its first loss in operations since 1992

  9. Consequences Cont. • Firestone’s earnings dropped 80 percent in 2000 • A net loss $510 million, largely due to $750 million in legal expenses

  10. Rebuilding Firestone’s Image • Option 1 – De-emphasize Firestone and push the Bridgestone name • Option 2 – Get rid of Firestone’s name • Option 3 – Salvage the brand

  11. What Went Wrong? • New York Times story came out in 1996 • Blaming took place instead of solving the problem immediately • Stubborn mind set of top executives

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