FORD AND FIRESTONE'S TIRE RECALL:

THE COSTLIEST INFORMATION GAP IN

HISTORY

Presented by----

•Palash Goyal - 2014 MBA-15

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•Founded by Henry Ford in

1903.

• Global auto Manufacturer.

• Owns many automotive brands

including Ford, Mercury,

Lincoln & Volvo.

•Founded by Harvey Firestone in

1900.

• Acquired by Bridgestone tires, a

Japanese firm.

•Supplies tires for various

vehicles.

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Firestone’s Longrelationship with

Ford Motor company began in 1906,when Ford

Motor bought 2000 sets of tires

from Harvey Firestone.

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About the case……

1988

1991

Firestone weakened by 1978 tire recall.

In may, Bridgestone took over Firestone

and saved them from bankruptcy due to

the recall.

Bridgestone/Firestone ATX, ATXII and

Wilderness AT tires were being used on

the Ford Explorer. 4

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Cont…..

1999In March, Bridgestone/ Firestone sent

a confidential memo to Ford.

In August, Ford announced a recall in

16 foreign countries, but not in US and

NHTSA not notified.

1992

In 1992, Ford started to receive

complaints regarding the Firestone tires.

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Firestone tires

2226

Complaints

More than

400 injuries.

101 people

died

involving

Trend

separation

between

1992-1999 6

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Tread Separation occurs when the rubber tread

begins to separate from the steel belts inside the

tire. This occurs because it is hard to adhere

rubber to steel. Tread Separation becomes more

likely at high speeds and in warmer climates.

What is Tread Separation?

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•After being informed of numerous complaints,

NHTSA (National Highway Traffic Safety

administration) met wit Ford and Firestone to

discuss a plan of action.

•On august, Bridgestone/Firestone inc. issued a

recall of 6.5 million tires.

•The recall was 90% completed in December.

2000

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•Firestone released a memo to Ford dated March 12,

1999, in which Firestone expressed "major

reservations" about a Ford plan to replace Firestone

tires overseas.

•Ford CEO Nasser testified before a joint congressional

hearing that "this is clearly a tire issue and not a vehicle

issue.

•Ford said it was under no obligation to report overseas

recalls.

Sept 2000…

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•Ford did not have warranty data on tire recalls.

•Firestone’s damage claims moved to

Nashville; warranty adjustments in Ohio

•"Trend identified after-the-fact by the New York

Times.

•Department of Transportation doesn’t have

funding to track all data.

•NHTSA: “our testing is clearly outdated”

Cont..

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2001

Yoichiro Kaizaki, the president and chief executive of the

Bridgestone Corporation, resigned in January.

May 22, 2001—Bridgestone/Firestone

ended its 100-year relationship as a

supplier to Ford, accusing the

automaker of refusing to acknowledge

safety problems with the Explorer.

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Which company was responsible???

or

Other believed

that Ford should

share

Responsibility.

Many people

blamed

Firestone.

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2002

The NHTSA found that Firestone was

responsible for tire separation.

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Crisis in information management…

The information was available, but it was not easy to

get at and it was not shared.

Role of databases and data management…

There were several isolated databases.

There were no easy ways to detect trends.

There were no ways to share data (Ford had to “pry”

information from Firestone).

Not all data collected.

MIS Application…

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•There was not an environment of information

sharing.

•Not all parties were collecting the correct data.

•No one was proactive about looking into problems.

•Both Ford & Firestone were responsible.

Conclusion

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Suggestion…

There should be implementation of information system.

There should be environment of information sharing within

the organization and between the parties.

Need to be PROACTIVE not reactive!

Better trend analysis

Causes of problem should be identified, than corrective

action must be taken.

Data that is collected should be used effectively

& efficiently.

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Questions???