Ford slides (Spring 10)

Report
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
• First contract established in 1906
• Martha Firestone, Harvey’s granddaughter,
married William Clay Ford, Henry Ford’s
grandson
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
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
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
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
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
Consequences Cont.
•
•
Firestone’s earnings dropped 80 percent
in 2000
A net loss $510 million, largely due to
$750 million in legal expenses
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
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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