Ford VS. FirestoneThe ProblemFrom the BeginningThe Blame Game - FirestoneThe Blame Game - FordWho is at Fault?Drivers at Fault?The ConsequencesConsequences Cont.Rebuilding Firestone’s ImageWhat Went Wrong?Ford VS. FirestoneFord VS. FirestoneMMS Chapter 23MMS Chapter 23The ProblemThe 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 overFrom the BeginningFrom the Beginning•Partners dating back to 1895•First contract established in 1906•Martha Firestone, Harvey’s granddaughter, married William Clay Ford, Henry Ford’s grandsonThe Blame Game - FirestoneThe 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 pickupThe Blame Game - FordThe 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 hotWho is at Fault?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 IllinoisDrivers at Fault?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 blowoutsThe ConsequencesThe 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 1992Consequences Cont. Consequences Cont. •Firestone’s earnings dropped 80 percent in 2000•A net loss $510 million, largely due to $750 million in legal expensesRebuilding Firestone’s ImageRebuilding 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 brandWhat Went Wrong?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