WASHINGTON (May 24, 2001)–The 95-year relationship between Ford Motor Co. and Bridgestone/Firestone Inc. changed slowly over time from a gentlemen's agreement to a powder keg. Eventually, Ford lit a match, and the relationship exploded.
Incensed over Ford's plan to recall up to 13 million Firestone Wilderness AT tires that Bridgestone/Firestone insists are safe, the tire maker informed the auto maker May 21 that it would no longer supply it with original equipment tires.
“Business relationships, like personal ones, are built upon trust and mutual respect,” said John T. Lampe, BFS chairman, president and CEO, in a letter to Ford CEO Jacques Nasser. “The basic foundation of our relationship has been seriously eroded. This is not a decision we make lightly after almost 100 years of history. But we must look to the future and the best interests of our company, our employees and our other customers.”
Mr. Lampe gave a copy of the letter to Carlos Mazzorin, Ford group vice president of global purchasing, during a May 21 meeting at BFS headquarters in Nashville. The purpose of that meeting, Mr. Nasser said the same day, was to present data to Firestone officials with which Ford had determined there are safety problems with the 15-, 16- and 17-inch Firestone Wilderness AT tires Ford used on the Ford Explorer and other SUVs.
“We are deeply disappointed that upon hearing and seeing this analysis of Firestone Wilderness AT tires, Firestone decided not to work together for the safety of our shared customers, which is the only issue that matters,” Mr. Nasser said in a prepared statement.
Mr. Lampe expanded on his letter at a May 21 press conference, in which he accused Ford of “attempting to divert the attention and scrutiny away from their vehicles by casting aspersions on Firestone....Most of the deaths and injuries involve Explorers, not other vehicles.”
Among other things, the bustup between the two companies leaves unclear what Firestone is going to do with the production capacity freed by from dropping Ford as an OE customer. The Nashville-based tire maker had not answered that question as of May 23. Mr. Lampe said at the May 21 press conference that his company could well survive the loss of Ford's OE business, which represents less than 5 percent of its total revenue.
Firestone's OE business with Ford, however, also represents 3.7 million tires annually, or 17 percent of Ford's total OE tire needs, according to Ford. It also was unclear which tire makers will get that business, although “Goodyear and Michelin are likely beneficiaries of this increased demand from Ford,” according to Rod Lache, an analyst with the Global Auto Team of Deutsche Banc Alex. Brown in New York.
The relationship between Ford and Firestone began in 1906, when Henry Ford ordered 8,000 tires from Harvey Firestone as original equipment for the first Model Ts. It has taken less than a year to become one of mutual enmity, though Ford Chairman William Clay Ford Jr.–whose mother was a Firestone—said he could envision the two companies working together again. “We never close the door on anyone,” he said.
The crux of the issue is who is to blame for the 174 reported deaths more than 700 injuries attributed to tread separations in Firestone ATX, ATX II and Wilderness AT tires by the National Highway Traffic Safety Administration. Ford insists the tires alone are to blame; Firestone says the design of the Ford Explorer, on which most of the failed tires were placed as OE equipment, is at least partly at fault.
In any case, Firestone claims that any potentially defective tires were covered by the 6.5-million-tire recall begun last August. Ford's unilateral decision to triple the size of the recall brought the relationship between the two companies crashing down, in a flurry of accusations and contradictory data which rehash the argument the companies have had for most of the last nine months.
On May 18, the day after news leaked to the media about Ford claiming to find safety problems with non-recalled Firestone tires, Firestone released charts showing among other things that Ford Explorers have 10 times the tire failure rate as Ford Rangers equipped with the exact same tires, and that Wilderness tires perform better than comparable tires made by other companies.
Then and on subsequent days, Firestone accused Ford of deliberately concealing information and of willfully ignoring Firestone's analysis of the tread separation problem.
“Our analysis suggests that there are significant safety issues with a substantial segment of Ford Explorers,” Mr. Lampe said in the May 21 letter to Mr. Nasser. “We have made your staff aware of our concerns. They have steadfastly refused to acknowledge those issues.”
On May 22, a Firestone spokeswoman added that Ford didn't tell Firestone of its recall plan at the May 21 meeting. “They did not ask us to join with them on a recall or a replacement program,” she said in a prepared statement. “They told us they had made absolutely no decision concerning our tires on their vehicles.”
Ford replied at its May 22 conference with its own facts and figures. John Rintamaki, Ford group vice president and chief of staff, compared the tread separation figures of 2.9 million Firestone tires and 2.9 million Goodyear tires that were OE on Ford Explorers. All the tires were made to the exact same specifications and had the same recommended air pressures, according to Mr. Rintamaki.
Far from never sharing information with Firestone, Ford sent the tire maker some 2½ million pages of data, according to Mr. Rintamaki. He also said Firestone's comparison of the tire failure rates of the Explorer and the Ranger was a false analogy, between the Explorer is a sports-utility vehicle and the Ranger is a pickup truck. “That data would be the same for any manufacturer,” he said.
As for not telling Firestone about the recall plans, Mr. Nasser said Ford officials would have done so had Firestone not cut them off. “We didn't ask them (to join in the recall) because they said they wanted to terminate the relationship, and that was that,” he said.
Not to be outdone, Firestone released further charts May 23, showing that Ford Explorers are twice as likely to roll over in a tread separation accident as other SUVs, and disseminated an article from the Miami Herald which stated that Venezuela is considering a consumer ban on Explorers.
“The tires Ford is replacing under this program are safe,” the tire maker said in a prepared statement accompanying the charts. “But, for the Ford Explorer, the question of safety remains.”
The public sniping between the two companies will do neither any good, according to Rob DeSisto, vice president and research director of customer relationship management at Stamford, Conn.-based research and advisory firm Gartner Inc.
“The finger-pointing may advance the legal agenda of both companies,” Mr. DeSisto said in a press release. “However, the current customers facing the recalls and potential customers for both tires and cars are all but ignored in this breakup. In this divorce, customers won't trust either company and will simply find a new home for their automotive purchases.”