BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

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

Sunday, 17 June, 2001, 08:51 GMT 09:51 UK
Firestone faces $1bn lawsuit
Ford Explorer
Explorer sales have declined since the Firestone tyre recall
The US tyre-maker Firestone, owned by Japan's Bridgestone, is facing a $1bn lawsuit in Florida.

Lawyers for the family of a couple who were killed when their Ford Explorer overturned in May 2000 say that anything less "would just be a slap on the wrist and business as usual."

Edelio and Norma Herrera died as the family was returning from a trip to Disney World. Their car was equipped with Wilderness AT tyres which have now been recalled.

More than 170 deaths have now been linked to accidents involving Ford Explorers equipped with Firestone tyres, and Ford has now ended its relationship with the tyre-maker.

Ford has warned its shareholders that it could face up to $10bn in lawsuits arising from the Ford Explorer deaths.

Firestone has argued that it was design flaws in the vehicle, not the tyres, which were the main cause of the accidents.

But Ford is now planning to demand that Firestone shares the cost of replacing its tyres.

Richard Parry-Jones, head of Ford's global product development and quality, said:
"The issue of whether or not we will recover, seek to recover, any money from Firestone as a result of this will be something that we'll be paying more attention to and considering more deeply in the coming few weeks."

Ford cut ties

Last month Ford recalled all 13 million Firestone tyres at a cost of $2.1bn, marking the end of its 100-year relationship with US tyre-maker.

"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.

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."

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.

Search BBC News Online

Advanced search options
Launch console
See also:

01 Jun 01 | Business
Firestone calls for Ford probe
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
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories