Case Analysis Report Ford Motor Company and Firestone

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  • Topic: Ford Motor Company, Firestone Tire and Rubber Company, Goodyear Tire and Rubber Company
  • Pages : 9 (3611 words )
  • Download(s) : 224
  • Published : April 22, 2012
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Case Analysis Report
In August 2000, Ford Motor Company and Firestone Tire Company recalled 6.5 Million ATX and AT tires that had been installed on Ford’s Explorer model SUV. At the time, it appeared as though Ford and Firestone were doing the right thing. They had found out that the tread separated on Ford Explorers in states with intense heat, such as Florida and Texas. However, it later came to light that both Ford and Firestone had known about these problems earlier than 2000 and that Ford had even had a similar recall in 9 countries the previous year. Firestone however had disagreed with the recalls prior to 2000. Many of these countries were in the Middle East where temperatures are frequently in excess of 100° Fahrenheit. The Stakeholders

There are numerous stakeholders in this case some, such as Ford and Firestone by not being forthright with the consumer had a lot to gain and others such as the consumers had a lot to lose. Ford Motor Company

Ford Motor Company is one of the largest stakeholders in this case. They had the most to gain from selling the Explorers and not publicizing the potential problems with Firestone tires. By issuing a recall, they would lose both money and customers if the public thought their SUVs were unsafe. My problem with Ford is that they knew that there was a problem with the Ford Explorer before it went into production. Ford engineers recognized that by using the larger P235 tire, there was a potential for more rollovers. Ford chose to go with the larger P235 tire over the P225 tire. Ford also commissioned their engineers to come up with ways to increase the stability of the SUV prior to production. The engineers came up with 4 ways. The first was to widen the chassis by 2 inches. The second was to lower the engine, the third was to lower the tire pressure and the fourth was to stiffen the springs. Ford chose the third and fourth choices, which were the least expensive fixes for the company to make prior to production. Ford recommended a tire pressure of 26 p.s.i. over the normal 30 to 35 p.s.i. that Firestone usually recommends. (GREENWALD, 2001) However, when Ford decreased the tire pressure, they in turn decreased fuel efficiency and asked Firestone to fix the problem. Firestone decreased the weight of the tire by about 3% (GREENWALD, 2001) Ford did not increase the size of the chassis by 2 ½ inches until 2002 and lower body of the SUV to make it safer. (GREENWALD, 2001) Firestone

Another large stakeholder here is Firestone Tires. Firestone manufactured the tires that were known to shred in intense heat. Firestone had a responsibility to both its shareholders and its customers to build a quality product. I believe that part of Firestone’s responsibility was to disagree with Ford when they requested that the tires be inflated at 26 p.s.i. and not the standard 30 to 35 p.s.i. There is some question as to whether the shredding of the tires was directly related to the lower tire pressure. I think that Firestone had had such a long working relationship with Ford that they chose not to argue with Ford over the tire pressure possibly for fear of alienating the company and losing the business. However, even after Ford decreased the tire pressure, Ford still requested that Firestone decrease the weight of the tire, so that Ford could increase fuel efficiency on the Explorer. This was yet another chance for Firestone to stand up and say no, they did not, they complied with Ford’s request. Firestone had an ethical responsibility to stand-up and disagree with Ford on both of these requests if they felt that they would cause harm to people. They chose not to. The Consumer

The customer of the Ford Explorer was one of the biggest losers in this case. They were the individuals who unbeknownst to them were driving around on an explosive time bomb. The people who lived in hotter states, such as Texas, Florida and Arizona were the ones with the most to lose....
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