The Firestone Tire Controversy


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Case Details:

Case Code : BECG005
Case Length : 12 Pages
Period : 1991 - 2002
Pub. Date : 2002
Teaching Note : Available
Organization : Firestone tire company, NHTSA, NUTS
Industry : Automobile Industry
Countries : USA

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

The Controversy

Ford and Firestone seemed to have known about the flaws in the tires for almost a year prior to the recall but it wasn't until NHTSA launched a preliminary investigation that Firestone announced a voluntary recall. Questions were raised about how Ford and Firestone responded to the first evidence of tire problems...

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...

Ford's Response

Analysts felt that Ford's response to the crisis was also not very positive. They chided Ford CEO, Jacques Nasser (Nasser) for appearing too stiff on Television as a spokesman for Ford...

The Controversy Deepens

In mid 2001, a committee was formed consisting of the members of the US House Energy and Commerce to look into the problem of tread separation of Firestone tires. During the same time, Ford announced plans to replace about 13 mn Firestone tires used on its vehicles...

The Trial Begins

In August 2001, out of the hundreds of lawsuits filed by the victims and their families, only one made it to the trial. This case involved a South Texas family injured in a crash in a Ford Explorer (Refer Exhibit VIII). The trial came more than a year after NHTSA said that it was looking into the problem...

The Future of Firestone and Ford

In mid 2001, Firestone announced that it would shut down one of its US plants, which could be its Decatur, Illinois, plant by no later than December 31, 2001. This would eliminate some 1, 500 jobs. The Decatur Illinois plant produced many of the 6.5 mn Firestone tires recalled in August 2000...

Exhibits

Exhibit I: Deaths and Injuries Resulting from Firestone Tire Failures in Us (As on February 6, 2001)
Exhibit II: NHTSA Firestone Incident Database
Exhibit III: NHTSA Firestone Incident Database Total Crashes
Exhibit IV: NHTSA Firestone Incident Database Fatality Crashes
Exhibit V: NHTSA Firestone Incident Database Injury Crashes
Exhibit V: NHTSA Firestone Incident Database Crashes with Rollover
Exhibit VII: Chronology of Events in Ford/Firestone Controversy
Exhibit VIII: The Trial


 

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