Firestone
Tara D. Griffin
November 2, 2014
MGT 500
Ford Explorers with Firestone Tires: Ill-Handling a Killer Scenario
A product defect that leads to customer injuries and deaths through manufacturer carelessness constitutes the most serious crisis that any firm can face. In addition to destroying brand reputation, ethical and social responsibility abuses are involved, and then legal and regulatory consequences. Managing such a crisis becomes far worse, however, when the manufacturer knew about the problems and concealed or denied them.
This case is unique in that two manufacturers were culpable, but each blamed the other. As a result, Firestone and Ford were savaged by the press, public opinion, the government, and a host of salivating lawyers. Massive tire recalls destroyed the bottom line and even endangered the viability of Bridge stone/ Firestone; sales of the Ford Explorer, the world's best-selling sport-utility vehicle (SUV), plummeted 22 percent in April 2001 from the year before, even as domestic sales of SUVs overall climbed 9 percent.
The Scenario
Firestone tires mounted on Ford Explorers were linked to more than 200 deaths from rollovers in the US, as well as more than 60 in Venezuela and a reported 14 in Saudi Arabia and neighboring countries. A widely publicized lawsuit took place in Texas in the summer of 2001. It was expected that the jury would determine who was most to blame for the deaths and injuries from Explorers outfitted with Firestone tires. Ford settled its portion of the suit before the trial began while Firestone became the sole defendant.
Ford and Firestone had a long, intimate history. In 1895, Harvey Firestone sold tires to Henry Ford for his first automobile. Henry and Harvey became business confederates and best friends. The first intimation of trouble came in 1999, after 14 fatalities occurred; Ford began replacing the tires of Explorers. There were many fatalities due to the hot weather and under-inflation of the tires.
In years to
November 2, 2014
MGT 500
Ford Explorers with Firestone Tires: Ill-Handling a Killer Scenario
A product defect that leads to customer injuries and deaths through manufacturer carelessness constitutes the most serious crisis that any firm can face. In addition to destroying brand reputation, ethical and social responsibility abuses are involved, and then legal and regulatory consequences. Managing such a crisis becomes far worse, however, when the manufacturer knew about the problems and concealed or denied them.
This case is unique in that two manufacturers were culpable, but each blamed the other. As a result, Firestone and Ford were savaged by the press, public opinion, the government, and a host of salivating lawyers. Massive tire recalls destroyed the bottom line and even endangered the viability of Bridge stone/ Firestone; sales of the Ford Explorer, the world's best-selling sport-utility vehicle (SUV), plummeted 22 percent in April 2001 from the year before, even as domestic sales of SUVs overall climbed 9 percent.
The Scenario
Firestone tires mounted on Ford Explorers were linked to more than 200 deaths from rollovers in the US, as well as more than 60 in Venezuela and a reported 14 in Saudi Arabia and neighboring countries. A widely publicized lawsuit took place in Texas in the summer of 2001. It was expected that the jury would determine who was most to blame for the deaths and injuries from Explorers outfitted with Firestone tires. Ford settled its portion of the suit before the trial began while Firestone became the sole defendant.
Ford and Firestone had a long, intimate history. In 1895, Harvey Firestone sold tires to Henry Ford for his first automobile. Henry and Harvey became business confederates and best friends. The first intimation of trouble came in 1999, after 14 fatalities occurred; Ford began replacing the tires of Explorers. There were many fatalities due to the hot weather and under-inflation of the tires.
In years to