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The BBC's Andrew Clark
"Firestone has been trying hard to boost its image"
 real 56k

Tuesday, 22 May, 2001, 21:21 GMT 22:21 UK
Ford confirms $2.1bn tyre recall
Ford Explorer
Explorer sales have declined since the Firestone tyre recall
Ford has confirmed it will recall 13 million tyres at a cost of $2.1bn, marking the end of its 100-year relationship with US tyre-maker Firestone.

The plans to replace up to 13 million Firestone tyres is in addition to last year's massive recall.

"We do not have the confidence in these tyres to keep our customers safe," said Jacques Nassar, chief executive of Ford at a press conference.

Earlier on Tuesday, Firestone said that it will no longer supply its products to Ford.

"Business relationships, like personal ones, are built upon trust and mutual respect," said Firestone's chief executive John Lampe.

"We have come to the conclusion that we can no longer supply tyres to Ford since the basic foundation of our relationship has been seriously eroded."

At issue is the safety of Firestone's Wilderness AT tyres which are standard on the Ford 2002 Explorer sports utility vehicle.

The new Explorer is supposed to be a safer version of the model at the centre of last year's Firestone tyre safety scandal.

Ford actions

The company will take the $2.1bn charge in the second quarter and expects it to weight heavily on its earnings.

The world's second largest carmaker has also suspended its share buy back.

Ford says it will suspend production of some vehicle lines to make more tyres available to those already on the road.

The recall is expected to take up to nine months and Firestone's rival Goodyear has said it is working closely with Ford to address the problem.

'Safety concerns'

Firestone's John Lampe also criticised the Ford for being "unwilling" to share any information with Firestone on the Ford Explorer.

"Our initial analysis... suggests very strongly that there are safety concerns with a large segment of the Ford Explorers on the road today," he said.

"Our tyres are absolutely safe and yet they replaced tyres in Venezuela and Ford Explorers continue to roll over," he added.

"We believe they are attempting to divert scrutiny of their vehicle by casting doubt on the quality of Firestone tyres. The tyres are safe."

PR campaign

Firestone has begun a public relations campaign in recent weeks, after enduring months of public scrutiny that included testimonies before the US Congress by Ford and Bridgestone-Firestone officials.

Tyres made by Firestone, a unit of Japan's Bridgestone, are alleged to have contributed to more than 120 deaths in North and South America alone.

Nashville, Tennessee-based Firestone says its "making it right" advertisement stresses the tyre manufacturer's goal of increased quality control and hopes to rebuild consumer confidence, following the Explorer debacle.

Bridgestone's stock price has taken a hit, having fallen 40% from year-ago levels.

Redesigned Explorer

Meanwhile, Ford has seen sales of its new Explorer models decline in the wake of the controversy, despite the introduction of a redesigned Explorer earlier this year, which the car maker has said is safer.

Ford employees, who asked not to be identified, told the New York Times that the company hoped to complete a review of the tyres' possible safety problems by the end of May.

The National Highway Traffic Safety Administration (NHTSA) is the final arbiter in the decision.

It was the government agency's investigation last year that resulted in the recall of the 6.5 million Firestone tyres.

The agency has requested that Firestone expand the recall to include additional tyres, but the company has refused to do so.

In a separate development on Monday Ford said it was recalling 50,000 of its Explorer vehicles after fears that a production line fault has sliced into tyre treads.

This problem is unrelated to Firestone tyres.

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See also:

21 May 01 | Business
Tyre scare prompts Explorer recall
19 Apr 01 | Business
Ford profits fall 41%
23 Mar 01 | Business
Ford faces 7bn lawsuits
03 Oct 00 | Business
Firestone resignations expected
18 Oct 00 | Business
US tyre crisis hits Ford earnings
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