WASHINGTON (May 23, 2001)–Ford Motor Co.'s announcement May 22 that it is unilaterally recalling up to 13 million Firestone Wilderness AT tires has met with approval on at least one front.
Joan Claybrook, president of Public Citizen, a consumer advocacy group that contends the tires Ford is replacing are just as dangerous as the tires BFS originally recalled, said the auto maker's action was commendable, if overdue. “It's inconceivable that neither Ford nor Firestone was able to reach this conclusion before us,” Ms. Claybrook said. “Still, we are pleased that Ford is taking the initiative to address the problem, as Firestone has refused to do.”
Ford in a special press conference May 22 said it will spend $3 billion—$2.1 billion after taxes–to recall the tires on Ford Explorers, Mercury Mountaineers, Expeditions and Ranger and F-series pickup trucks.
“We simply do not have enough confidence in the future safety of these tires. It's as simple and basic and fundamental as that,” Ford CEO Jacques Nasser told those gathered for the press conference at Ford headquarters in Dearborn, Mich.
Ford's lack of faith in the tires has enraged Bridgestone/Firestone Inc. The Nashville, Tenn.-based tire maker insists that the tires are safe; that the design of the Ford Explorer is at least partly to blame in the tread separation accidents which have claimed 174 lives, according to statistics from the National Highway Traffic Safety Administration; and that all questionable tires were already recalled in the 6.5-million-tire action last August.
The day before the auto maker announced the new replacement program, BFS officially dropped Ford as an original equipment customer.
Mr. Nasser made a quick trip to Washington before the press conference to discuss Ford's plans with various government officials, including Transportation Secretary Norman Y. Mineta; Sen. John McCain, R-Ariz.; and Reps. Billy Tauzin, R-La., and John Dingell, D-Mich.
Mr. Tauzin said after meeting with Mr. Nasser that he plans to call further hearings on the Ford Explorer and Firestone tires before the House Energy and Commerce Committee as soon as possible after Memorial Day. John T. Lampe, president and CEO of Bridgestone/Firestone, said he welcomed the hearings.
Mr. Lampe met with Mr. Tauzin the evening before Mr. Nasser did, and said he told Mr. Tauzin “we believe there are significant safety concerns with a substantial segment of Ford Explorers. We look forward to presenting our information to the committee and showing them our tires are safe.”
Mr. Nasser, at the press conference, said Ford was basing its decision on three sources—the tires' field performance; information on comparative tire performance from NHTSA and Ford's own technical analysis.
Although the non-recalled Wilderness tires “performed substantially better” on the Ford Explorer and other vehicles than the recalled tires, Mr. Nasser said, the most recent field data Ford received from Bridgestone/Firestone showed a “trend upward” for failure rates among those tires as they aged. Also, he said, NHTSA's information showed that the failure rates of tires in the Wilderness tires' class were “significantly lower” than that of the non-recalled Wilderness tires.
“It was our responsibility to act immediately” upon discovering this, Mr. Nasser said.
Ford has said that the failure rate among the non-recalled Wilderness tires is about 15 per million. This is roughly triple the normal rate but vastly below the failure rate of the recalled ATX, ATX II and Wilderness tires, which ranged from 60 to above 200 per million, according to John Rintamaki, Ford group vice president and chief of staff.
Mr. Rintamaki said Ford will replace all 15-, 16- and 17-inch Wilderness tires on all of its vehicles., including more than 80 percent of which are on Ford Explorers. The 1.5 million Wilderness AT 's used to help replace last year's recalled tires will be replaced, in turn, and no Firestone tires will be used in the new replacement program, he said.
Goodyear and Michelin North America Inc. acknowledged being approached by Ford to help provide replacement tires, and a Reuters report from Hanover, Germany, also said Ford was in talks with Continental A.G. about providing replacement tires.
“Goodyear is prepared to do whatever is necessary to help consumers get the right tires on their vehicles as quickly as possible,” the Akron-based tire maker said in a prepared statement May 22. “To this end, we are urgently implementing plans to ramp up production to meet customer needs.”
A Michelin spokeswoman acknowledged Ford contacted her company May 21 about providing replacement tires. The extent of the aid Michelin will give Ford is still being decided, she said.
While Ford was still working out the details of the replacement plan May 23, Mr. Rintamaki said at the press conference that owners of the Wilderness AT tires may get them replaced free of charge at any of the 3,500 Ford and Lincoln-Mercury dealers in the U.S. They also can get their tires replaced at “authorized” tire dealerships and apply to Ford for reimbursement at up to $110 for each 15- or 16-inch tire and $130 for each 17-inch tire.
A Ford spokesman said May 23 that Ford was conferring with various tire makers about using their tire dealers for the replacement program. He could not say whether both company-owned and independent dealers would be involved.
Ford will contact owners of older tires first about tire replacement, because “newer tires under three years old have extremely low failure rates,” Mr. Rintamaki said. To free up tires for the program, Ford will suspend production of the Ford Ranger for two weeks at its St. Paul, Minn., and Edison, N.J., facilities, and also stop making Ford Explorers at Louisville, Ky., for one week, he added.
The company's after-tax loss on the informal recall is the equivalent of $1.10 per share, Ford said. It will take the charge in its second quarter, for a loss of 35 cents per share for the quarter and $1.25 to $1.35 per share for the year.
Ford's tire replacement campaign represents an enormous blow to Bridgestone/Firestone, which has consistently sparred with Ford over how the blame for the tire failures and fatal accidents should be apportioned.
When Ford's concerns about the Wilderness tires started leaking to the media May 17, Bridgestone/Firestone responded that it was “extremely concerned” about Ford's allegations.
“Our review of the data does not support the allegations raised today by Ford,” the tire maker said. “It is difficult to understand why that company would choose to go to the media and not review their data and analysis first with Firestone.”
The testimony of other auto makers tend to support Bridgestone/Firestone's contention that the tires are safe. General Motors Corp., for example, has said all along that it has had no problems with the Wilderness tires and intends to continue using them.
Auto industry analysts see nothing good coming from the recall, at least as far as the two companies' business is concerned.
“Ford's actions yesterday still do not resolve the issue of who is to blame,” said Saul Rubin, an analyst with Autos Equity Research at UBS Warburg. “The acrimony will keep the issue in the press for some time and will be damaging to both companies.” Replacing the tires offers no resolution, Mr. Rubin said, because “with both players locked in public battle, consumers end up confused.”
Ford, meanwhile, “will probably take similar actions in other countries,” Mr. Rintamaki said, although the auto maker must make allowances for different situations, products and climates.