Bridgestone/Firestone (BFS) has agreed to pay Ford Motor Co. $240 million to settle all remaining Ford Explorer-related financial issues stemming from the August 2000 recall of 6.5 million Firestone ATX, ATX II and Wilderness AT tires and Ford's unilateral action in May 2001 to replace 13 million Firestone Wilderness AT tires.
While that closes the book on the dispute between the two companies, neither company has any plans to start doing business with the other again in North America, according to BFS and Ford spokespersons.
Ford's 2001 replacement action prompted then-BFS Chairman John Lampe to sever all ties with Ford, the day before Ford went public with the program.
Neither BFS nor Ford admits any responsibility in the compromise settlement, according to both companies. A BFS spokeswoman said her company has spent $440 million to date on recall-related costs, not including the agreement with Ford. In 2001 Bridgestone Corp. took $858 million in charges against earnings to cover recall-related costs.
A Houston television station first began airing reports in February 2000 of fatal accidents involving Ford Explorer sport-utility vehicles equipped with Firestone tires. Investigating the issue, the National Highway Traffic Safety Administration (NHTSA) eventually attributed 271 deaths to accidents caused by tread separations on tires on these vehicles.
Then-Ford CEO Jacques Nasser was quick to attribute all blame to BFS, and Masatoshi Ono, who then headed BFS, accepted blame on behalf of the company. Mr. Lampe, who soon replaced Mr. Ono, insisted that the design of the Ford Explorer was partly responsible.
After officially severing ties with Ford, BFS continued to honor its existing North American contracts with the auto maker, making its last tire delivery April 1, 2003.
In a speech at the Chicago Auto Show in March 2004, incoming BFS CEO Mark Emkes said his company had reopened lines of communication with Ford but didn't foresee resuming business with the auto maker any time soon.
Spokespersons for both companies reaffirmed Mr. Emkes' statement on Oct. 12, the day the settlement was announced. The BFS spokeswoman, however, noted that Bridgestone Corp., BFS's parent firm, has never stopped doing business with Ford in Latin America, Europe and Asia.
The controversy over the Explorer-Firestone issue led directly to congressional passage of the Transportation Recall Enhancement, Documentation and Accountability (TREAD) Act in October 2000.
It also led to thousands of product liability and class-action lawsuits against both companies.
The $240 million settlement has nothing to do with the litigation, a Ford spokeswoman said.
``There are class-action suits still pending against the company, but we expect those to be dismissed,'' she said.
BFS had settled more than 2,100 Explorer-related lawsuits as of the second quarter of 2005, the company's spokeswoman said. ``We don't talk about how many suits are still pending, because many of those aren't even tire-related, and many of those that are don't involve our tires.''