1. ) Why did Sears, Ford and Firestone react differently to the same incident? Sears was one of the largest retailers of Firestone tires in the United States during the 2000 controversy. As they were simply just a dealer of tires to the public, they were inclined to halt sales of the tires before the official recall was announced for the benefit of their customers. Even though they had a longstanding relationship with Firestone, they had to pull the tires off the shelves for the good of their company’s image and the safety of their customers.
Even though Ford and Firestone both opposed this, Sears made a decision to pull the tires off the shelves because it was a moral call, not a business call. Ford reacted more aggressively by enlisting of research parties to find out flaws in the Firestone tires. Since Firestone and Ford had a long relationship dating back to the early 1900s, this seemed like a last minute effort to push the blame off of Ford and onto Firestone 100%. While Ford conducted these research studies, they shifted focus from their Ford Explorer performance issues and pushed the focus onto the tires the Explorers were equipped with.
Seeking out the tire manufacturing plant in Decatur, Illinois, they tried to make a case for improper manufacturing techniques as reasons behind the recall. Ford pushed the blame away from themselves and ultimately severed a longstanding business relationship with Firestone. Firestone produced tires that had poor performance and durability, especially at higher temperatures. To levy this lack of performance, they insisted on using the tires at a higher pressure to increase the lifespan and reduce the heat generated by these tires which ultimately was the cause of the defects.
Once it was discovered that these tires were the cause of the accidents because of the separating treads due to high temps and low pressure, Firestone then attached Ford and pointed the finger at their tire pressure recommendations. It was discovered that Ford failed its J-test emergency turns at higher tire pressures because they provided less road grip and stability so their recommendation was 26 to 30psi where Firestone pushed for 30psi. As a result of this discovery and public awareness of the tire pressure issue, Ford had to increase its recommended level for tire pressure.
2. ) What is your estimate of the financial loss to Ford and Firestone? In this case, Ford looks to be the hero where they dropped Bridgestone as the tire used on their explorer models and went with Michelin tires for their new models. Tires are only about 2% of the cost of a vehicle themselves, and tires are separately warranted so the relationship between tire manufactures and car manufactures are separate from a legal standpoint. Also, Ford wasn’t aware of any defect until a few days before the recall was announced.
Once they learned of this, they demanded Firestone pull the tires from the road. Whether or not tire pressure recommendations put fault on one company or another is irrelevant since the tires produced by Firestone were approved at Fords recommendations initially until the issues began to arise. Therefor, I estimate a slight financial loss for Ford as they will probably be affected by their affiliation with Firestone. For Firestone, I estimate they will receive substantial financial losses as they have been linked with 2 very large and severe tire manufacturing issues that have lead to deaths.
They also had to recall their tires and provide credits and new tires to people who met the criteria for the recalls. They had to recall over 6 million tires in 2000 and 13 million in 1978 for the same issues. This seriously diminishes their value as a company and the expense of recalling and providing new tires should create substantial losses for the company both in 2000 and years to come. They also lost their largest client, Ford and their Explorer model. 3. ) Who is responsible for the incident, Ford or Firestone?
In my opinion, Firestone is mostly to blame for this incident. They were producing tires below industry standards that did not have sufficient safety levels to be equipped on the Explorer models. After being cited for this back in 1978, it is not a coincidence anymore that they were taking shortcuts and doing improper testing of their equipment. Ford should also be to blame as they didn’t want Sears to recall the sales of these tires which predominantly were for use on the Explorer models.
However, this fault is not nearly as big as Firestones for trying to cover up their mistakes and shift blame to Ford. If Ford wanted a tire to be used on their Explorers at 26 to 30psi, then firestone should have said it provide such a tire because their tires need to be filled to 30psi. Also, regardless of the pressure, the quality was such that accidents would have occurred regardless of the pressure because of the poor quality of the tires. 4. ) As CEO of Ford, what would you do now?
I would sever the business relationship with Firestone to show the public and consumers that Ford doesn’t do business with companies that produce dangerous products and then lie about the real underlying causes. 5. ) As CEO of Firestone, what would you do now? I would recall all defective tires and re-strategize my product line to levy any ill feelings about our products. I would also conduct extensive quality control tests and make those tests public so in the future, any problems that do arise, the issues have been defined already and blame won’t be on Firestone.
6. ) Should Ford sever its relations with Firestone? I think Ford should sever its relations with Firestone for now. In a business decision, you have to lay personal relationships aside. Even with the 100+ year prior relationship, Firestone is tied to one of the largest controversy’s in the automotive industry and it involves one of the best selling product lines of Ford. Eventually if Firestone re-vamps its image and quality, Ford could have relations with Firestone again. 7. ) Could this disaster have been avoided? How?
If Firestone was unwilling to sell their tires to Ford because they knew Ford wanted to use them at a lower pressure, then Ford wouldn’t have been linked with the controversy. However, Firestone was still producing low quality and dangerous tires that had a manufacturing defect. The only way to avoid this would be to change the composition and quality of their tires. Had Firestone recalled the tires under the pretenses of the early warnings and signs of a manufacturing defect, they wouldn’t have looked like they were trying to hide their poor quality product and fault so much.