Issue: Jan 2005


100 + 10: Coming to Blows



The Ford/Firestone Fiasco

by Carla Kalogeridis

The automotive industry watched in shock and surprise as a generationsold business relationship between Ford Motor Co. and Firestone disintegrated into a finger-pointing, back-stabbing feud. It was a series of Explorer rollovers on U.S. highways during the mid- to late-1990s that first led Ford and Firestone to examine a string of similar accidents in Saudi Arabia, Thailand and Venezuela. As a result of this investigation, Ford elected to replace Wilderness AT tires on Explorers in nine countries; while the automaker did not notify the U.S. governments National Highway Traffic Safety Administration (NHTSA), neither was it required to do so.

However, by May 2000, NHTSA had launched its own investigation of the rollovers, and Ford and Firestone were deep in dispute over who was to blame. In August of that year, Bridgestone/Firestone recalled its first 6.5 million tires, mostly original equipment on the Ford Explorer. A different kind of blowout occurred when first-blood was drawn in May 2001 by Bridgestone/Firestone CEO John Lampe, who ended the tiremakers 95-year-old business with Ford when he went public with specific concerns about the safety of the Ford Explorer and the unusual number of rollover accidents the vehicle had experienced since 1996. The next day, Ford countered by announcing it would replace 13 million Firestone Wilderness AT tires tires that had been excluded from Firestones recall the previous August. Fords Jacques Nasser stated, We simply do not have enough confidence in the future performance of these tires keeping our customers safe.

It is generally accepted that some Firestone 15-inch Wilderness AT tires produced at its plant in Decatur, Ill., had defects that were at least a contributing factor in a wave of tread separations and rollover accidents (more than 335 claims out of 1.8 million tires manufactured). While Firestone maintains that the same tire that shreds on an Explorer holds up perfectly well on a Ford Ranger, Ford insists that Explorers fitted with Goodyear tires experienced far fewer tread problems than those sporting Firestones.

Several years have passed since this story made international news, and most industry observers, government investigators and state attorneys general would agree that Ford and Firestone share blame. While neither Ford Explorers nor Firestone tires appear unusually unsafe independently, it is curious that the combination of the two sometimes proved deadly. More than 174 deaths and at least 700 injuries were linked to accidents involving Firestone-equipped Explorers. Yet, despite the tragic losses sustained by the accident victims and their families, the industry will not soon shake the memory of the public finger-point- ing that left both companies appearing irresponsible and dishonest.

Looking back, it would seem that the Ford and Firestone separation was about far more than tires. It was about a renewed recognition of how critical it is for trust to exist between automotive supply chain partners. What NHTSA saw was two companies blaming each other and trying to save face, while safety for the endconsumer was shoved to the side. Amidst pressure to do something to ensure the same thing would never happen again, the Transportation Recall, Enhancement, Accountability and Documentation Act of 2000 (TREAD Act) was born in October 2002.

Under the TREAD Act, manufacturers and suppliers of automobiles, trucks, motorcycles, buses, trailers, tires and child restraints are required to record, sum up and report a broad collection of text data regarding dozens of components and safety systems. This data includes field reports, production statistics, injuries and fatalities, complaints, warranty claims and more. The first of regular on-going quarterly reports was due Aug. 31, 2003, and the mandatory five-year histories for all of this data were due a month later. Failure to provide the information on time puts companies at risk for stiff civil and criminal penalties. Today, with several cycles of TREAD Act reporting under its belt, the industry clearly understands that compliance is not optional.

While many manufacturers have bemoaned the extra cost and enormous challenge the TREAD Act presents to their IT infrastructures, others have begun to recognize strategic uses and advantages of TREAD data in warranty analysis, customer satisfaction, brand protection and supplier management. Some would even go so far to say that with North American warranty costs well over $8 billion a year, automakers being forced to put in systems that give a cross-platform and cross-channel view of vehicle safety and quality issues is a blessing in disguise. Furthermore, as TREAD Act reporting matures, consumers should be able to compare how fast OEMs respond to vehicle quality issues. For companies that do it right, said AMR Researchs Kevin Prouty in a December 22, 2002 report, it will be one more very public demonstration of quality manufacturing.

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