Ford Motors

On August 9, 2000, Bridgestone/Firestone, Inc. officially announced that it was recalling 6. 5 million of its Wilderness AT tires, most of which had been installed on Ford's popular SUV, the Explorer. It was reported that Explorers equipped with Wilderness AT tires had been involved in a large number of rollover accidents on the USA high way leading to more than 170 deaths and over 700 injuries, and more than 40 deaths in the other countries. After August 2000, Ford announced a recall of more than 1 million Firestone tires on Explorers and in May 2001, Ford recalled more 13 million Wilderness AT tires installed on its SUVs and pickup trucks.

The recalls resulted in hundred millions of financial loss to both Ford and Firestone. The poor quality leading to great losses of an organization demonstrates that Total Quality Management and Six Sigma play important roles in the production process. Six Sigma relies on statistical analysis to get to the root of intractable problems. Ford began training managers in the technique of Six Sigma in 2000 and the system had already produced results. However, Six Sigma needs to take time for the improvements to show up.

If Ford implemented Six Sigma earlier, the tragedy of poor quality had not happened. 1. In addition to the financial costs mentioned, what are some of the other costs, both internal and external to the firms, that can be associated with poor quality of the Firestone tires and Ford Explorers? In addition to the financial costs, the brand reputation and market shares of the two firms suffered heavy losses. Both firms had to take great effort to restore their confidence in their brands. Rebuilding the brand recognition is crucial to increase the market share.

It will take a few years to make pubic forget this tragedy, and the competitors will take the chance to occupy the market shares previously took by the Explorer. In the internal to the two firms, the morale of employees decreased due to the poor quality accidents. The colleagues in different divisions lost the trust built before. To resolve all the difficult problems, the top management should take great effort to recover the morale in short time, which was elemental to solve other problems. 2. Identify some of the management decisions at both Ford and Firestone that may have contributed to poor quality.

What was the rational for these decisions? To combine customer desires with competitive advantages, in designing the roomy and comfortable Explorer, the Ford management decided to mount the cabin on a narrow truck frame and front-end suspension system from Bronco II. This decision allowed Ford to manufacture Explorers on existing assembly lines and could largely decreased the costs. But the end result was that the Explorer had a high centre of gravity, most weight above the axles and extremely flexible springs.

These features resulted in a rollover when an Explorer was driven in high speed through sharp turns and sudden changes of direction. Several suggestions were made by Ford engineers to improve its stability, including widening the track width of the vehicle, lowering the engine, lowering the recommended tire pressure and stiffening the springs. However, such a major design change would have delayed the production of Explorers. To launch Explorers early in the market and gain the price premiums and greater market share, the management chose a lower tire pressure of 26psi because this alternative plan cost a little time and money.

This bad decision mostly led to blowouts occurring when Explorer was driven in high speed because it turned out that low pressure tires running on hot roads, especially in Explorers with heavy loads, experienced tread separation at higher than normal rates. Another poor decision was that Ford management called for a lower-heat- resistant "C" rated tire to reduce the costs. However, most of SUV manufactures installed "B" rated tires on vehicles. And Ford management chose Wilderness AT P235 tire although the Consumer Union tested that the confidence of P225 is higher than P235.

In Firestone, the management decided not to install a nylon layer between the steel belts and tread to decrease the costs. The nylon layer could decrease the steel belt's chafing on the tread rubber and reduce the chance of tread separation in a tire. The low pressure tires without a nylon layer resulted in tread separation and blowouts when they were running in high speed on hot roads. The management did not build a Total Quality Management system in the production process. For example, no inspections on tires were often happened.

Workers punctured air bubbles developed in the skim coat and sidewalls in some tires in production. This kind of action was not allowed in the quality control process. Another bad decision by management was 12-hour shifts and the payment of hourly rate based on production quotas. This caused that workers pursued quotas and did not care about the quality. The decision of using benzene added to old and dry rubber could reduce the quality of the tire. The management should look for a new kind of material instead of benzene. 3. For both Ford and Firestone, identify the potential causes for the accidents that occurred.

The working conditions in Firestone were poor and the relation between labour and management was strained, which resulted in a strike. This raised the possibility that quality declined while tires were being produced by strike-breakers because the ability and skills of strike-breakers were suspect. The Six Sigma system was not built until 2000 in Ford. Before that, the quality control method in Ford seemed not advanced and effective. The good suggestions which improved the quality of Explorers put forward by engineers were not accepted by the management.

This demonstrated that the Total Quality Management was not effectively set up in Ford, which potentially led to accidents that occurred. On August 9, 2000, Bridgestone/Firestone, Inc. officially announced that it was recalling 6. 5 million of its Wilderness AT tires, most of which had been installed on Ford's popular SUV, the Explorer. It was reported that Explorers equipped with Wilderness AT tires had been involved in a large number of rollover accidents on the USA high way leading to more than 170 deaths and over 700 injuries, and more than 40 deaths in the other countries.

After August 2000, Ford announced a recall of more than 1 million Firestone tires on Explorers and in May 2001, Ford recalled more 13 million Wilderness AT tires installed on its SUVs and pickup trucks. The recalls resulted in hundred millions of financial loss to both Ford and Firestone. The poor quality leading to great losses of an organization demonstrates that Total Quality Management and Six Sigma play important roles in the production process. Six Sigma relies on statistical analysis to get to the root of intractable problems.

Ford began training managers in the technique of Six Sigma in 2000 and the system had already produced results. However, Six Sigma needs to take time for the improvements to show up. If Ford implemented Six Sigma earlier, the tragedy of poor quality had not happened. 1. In addition to the financial costs mentioned, what are some of the other costs, both internal and external to the firms, that can be associated with poor quality of the Firestone tires and Ford Explorers? In addition to the financial costs, the brand reputation and market shares of the two firms suffered heavy losses.

Both firms had to take great effort to restore their confidence in their brands. Rebuilding the brand recognition is crucial to increase the market share. It will take a few years to make pubic forget this tragedy, and the competitors will take the chance to occupy the market shares previously took by the Explorer. In the internal to the two firms, the morale of employees decreased due to the poor quality accidents. The colleagues in different divisions lost the trust built before.

To resolve all the difficult problems, the top management should take great effort to recover the morale in short time, which was elemental to solve other problems. 2. Identify some of the management decisions at both Ford and Firestone that may have contributed to poor quality. What was the rational for these decisions? To combine customer desires with competitive advantages, in designing the roomy and comfortable Explorer, the Ford management decided to mount the cabin on a narrow truck frame and front-end suspension system from Bronco II.

This decision allowed Ford to manufacture Explorers on existing assembly lines and could largely decreased the costs. But the end result was that the Explorer had a high centre of gravity, most weight above the axles and extremely flexible springs. These features resulted in a rollover when an Explorer was driven in high speed through sharp turns and sudden changes of direction. Several suggestions were made by Ford engineers to improve its stability, including widening the track width of the vehicle, lowering the engine, lowering the recommended tire pressure and stiffening the springs.

However, such a major design change would have delayed the production of Explorers. To launch Explorers early in the market and gain the price premiums and greater market share, the management chose a lower tire pressure of 26psi because this alternative plan cost a little time and money. This bad decision mostly led to blowouts occurring when Explorer was driven in high speed because it turned out that low pressure tires running on hot roads, especially in Explorers with heavy loads, experienced tread separation at higher than normal rates.

Another poor decision was that Ford management called for a lower-heat- resistant "C" rated tire to reduce the costs. However, most of SUV manufactures installed "B" rated tires on vehicles. And Ford management chose Wilderness AT P235 tire although the Consumer Union tested that the confidence of P225 is higher than P235. In Firestone, the management decided not to install a nylon layer between the steel belts and tread to decrease the costs. The nylon layer could decrease the steel belt's chafing on the tread rubber and reduce the chance of tread separation in a tire.

The low pressure tires without a nylon layer resulted in tread separation and blowouts when they were running in high speed on hot roads. The management did not build a Total Quality Management system in the production process. For example, no inspections on tires were often happened. Workers punctured air bubbles developed in the skim coat and sidewalls in some tires in production. This kind of action was not allowed in the quality control process. Another bad decision by management was 12-hour shifts and the payment of hourly rate based on production quotas.

This caused that workers pursued quotas and did not care about the quality. The decision of using benzene added to old and dry rubber could reduce the quality of the tire. The management should look for a new kind of material instead of benzene. 3. For both Ford and Firestone, identify the potential causes for the accidents that occurred. The working conditions in Firestone were poor and the relation between labour and management was strained, which resulted in a strike.

This raised the possibility that quality declined while tires were being produced by strike-breakers because the ability and skills of strike-breakers were suspect. The Six Sigma system was not built until 2000 in Ford. Before that, the quality control method in Ford seemed not advanced and effective. The good suggestions which improved the quality of Explorers put forward by engineers were not accepted by the management. This demonstrated that the Total Quality Management was not effectively set up in Ford, which potentially led to accidents that occurred.