DETROIT (May 31, 2001)-—Administrative, advertising, labor and other overhead costs will account for more than half of the $3 billion Ford Motor Co. estimates it will have to spend to cover replacing 13 million Firestone Wilderness AT tires on its pickups and sport-utility vehicles.
Based on Ford's initial estimates, it will cost the auto maker $230 per tire to effect the replacement program. The cost of replacement tires to Ford for this program is estimated at between $75 and $100, based on retail prices and average markup figures.
Ford will spend the rest of the amount—-estimated at between $130 and $155 a tire-—to cover notification, advertisements, staffing a call center, running a web site, shipping and handling, disposal, dealer labor costs, and other administrative functions, a spokesman said.
Ford is offering consumers who purchase tires outside of the Ford dealer network $110 to $130 per tire, depending on the size.
The company has created a Web site-—http://fordfirestonewildernessatprogram.ford.com-—for consumers to check for the latest information.
Last year, Ford spent $500 million to cover costs associated with the recall of 6.5 million Firestone Wilderness, Wilderness AT and ATX radials. Bridgestone/Firestone Inc. booked $750 million in charges last year to cover its costs associated with the recall; only $388 million was attributed to the recall itself, with legal reserves accounting for the rest.