Ford VS. Firestone

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, Harveys granddaughter, married
  William Clay Ford, Henry Fords 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 Fords Explorer than on Fords
  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.

• Firestones earnings dropped 80 percent in 2000
• A net loss 510 million, largely due to 750
  million in legal expenses

10
Rebuilding Firestones Image

• Option 1 De-emphasize Firestone and push the
  Bridgestone name
• Option 2 Get rid of Firestones 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