The Firestone Tire Controversy

The Controversy Contd...

However, there was no definitive evidence to indicate that Ford's design specification for Explorer's tires was to blame. But Ford was switching over to 16-inch tires in its redesigned Explorer, which would be launched in 2002. Commented Ralph Hoar, a lawyer representing some of the victims, "There are a lot of smoke and mirrors going on, Ford can say it's Firestone's fault, and Firestone can say it's Ford's fault."⁵

Firestone's Response to the Crisis

Ever since Firestone announced its voluntary recall of Firestone tires in August 2000, its Chief Executive, Yoichiro Kaizaki (Kaizaki) did not make a public appearance. In September 2000, Business Week wrote that Firestone's behavior spoke volumes about the huge gap that existed between the US and the Japanese management.

All the Firestone executives in Japan were unwilling to respond to pleas from investors and the media for explanations and reassurance. Said an analyst, "This is a huge crisis, but Bridgestone and Kaizaki are handling it terribly." In September 2000, Firestone announced that it would offer free inspection of the 1.4 mn tires not covered in the August 2000 recall.

Firestone officials said that the tire models identified by NHTSA which were subject to higher than average rates of tread separation would be inspected without charge at the company owned stores and authorized retailers. However, NHTSA recommended that the tires included in the inspection should be recalled as preliminary investigation by NHTSA of some of the tires not included in the recall showed an incidence of tread separation that sometimes exceeded the rate for the recalled tires.

But Firestone declined to include the tires in the recall. John Lampe, Executive vice president, Firestone, said that Firestone would replace any tires found to be unsafe. Said Susan Sizemore, public relations manager at Bridgestone's US headquarters in Nashville, "This is not a recall. It's a customer satisfaction initiative. If necessary, we are replacing those tires with either our tires or a competitor's."

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5] Business Week, August 28, 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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