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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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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Introduction Contd...

Around 6.5 mn tires were recalled which included 3.8 mn Radial ATX and ATX II tires, and 2.7 mn Wilderness AT tires.

These tires were original equipment on certain Ford Explorer SUVs, Mercury Mountaineer, Ford Ranger pick up trucks and Mazda Navajo and B-series pick up trucks. (Refer Table I).

The Firestone tire recall was perhaps the biggest auto safety crisis in the US history. NHTSA put the death figure in February 2001 at 174 (Refer Exhibit I) which has risen from 101 deaths reported in September 2000.

However, analysts felt that there were as many as 250 deaths and more than 3000 injuries associated with the defective tires. Most of the deaths occurred in accidents involving the Ford Explorer and the victims and their families filed hundreds of lawsuits. (Refer Exhibits II-VI for a history of Firestone /Ford related incidents in the US).

In May 2001, Firestone announced that it was severing its ties with Ford and alleged that the problems in the Ford Explorer caused 174 deaths. Firestone alleged that Ford was trying to divert attention from the problems with Explorer. (Refer Exhibit VII for a chronology of events leading to Firestone's decision to stop supplying new tires to Ford.)

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...

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