The Firestone Tire Controversy

The Future of Firestone and Ford Contd...

Company sourced said that they would try to revive their North American operations by shifting focus to the Bridgestone brand. Shigeo Watanabe, president of Bridgestone said, "I don't think the Firestone brand will disappear, but the Bridgestone brand will grow." The recall of 6.5 mn Firestone tires on the Ford Explorer in August 2000 cost Ford about $ 500 mn. In 2001, Ford was expected to take a $ 2.1 bn after-tax charge to replace 13 mn more Firestone tires. Explorer sales had plunged 21% in 2001.

The company's earnings were expected to sink by 65% in 2001 to $ 2.3 bn. Ford's share of the US automobile market had fallen by 1.7 percentage points in 2001 to 23.1%. Nasser felt that the future of Ford (Explorer) would depend on how customers responded to Ford's reaction to the crisis. Said Nasser, "My message to consumers is, if you don't think we have behaved in the way the world's leading consumer company should behave, then tell us, because we want to earn that loyalty and respect."⁷

Commenting on Ford's future relationship with Firestone, Nasser said, "Given the importance of the relationship between tires and vehicle safety, and the importance of brand perception, how can you put Firestone tires on the new Explorer that comes out next January?"⁸

Exhibits

Exhibit I: Deaths and Injuries Resulting from Firestone Tire Failures in US (As on February 6, 2001)
Exhibit II: NHTSA Firestone Incident Database
Exhibit III: NHTSA Firestone Incident Database - Total Crashes
Exhibit IV: NHTSA Firestone Incident Database - Fatality Crashes
Exhibit V: NHTSA Firestone Incident Database - Injury Crashes
Exhibit VI: NHTSA Firestone Incident Database - Crashes with Rollover
Exhibit VII: Chronology of Events in Ford/Firestone Controversy
Exhibit VIII: The Trial

7] Fortune, September 18, 2000.
8] Fortune, September 18, 2000.

Case Details

Case Code : BECG005
Themes: Ethics in Business
Case Length : 12 Pages
Period : 1991-2002
Organization : Firestone tire company, NHTSA, NUTS
Pub Date : 2002
Teaching Note : Available
Countries : USA
Industry : Automobile Industry

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