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Wednesday, 18 October, 2000, 13:36 GMT 14:36 UK
US tyre crisis hits Ford earnings
Campaigner Melinda Evans and a Firestone Wilderness AT16
Campaigners say Firestone tyres have led to dozens of fatal accidents
US car giant Ford has suffered a dramatic drop in earnings as result of Firestone's tyre recall crisis.

Firestone tyres have been blamed for more than 150 road deaths in the US and Venezuela.

Most of the accidents have involved tyres fitted to Ford's Explorer sports utility vehicles, according to US investigators.

On Wednesday Ford reported a 7.4% drop in third quarter income to $888m, following the recall of 6.5 million tyres.

'Heading for record profits'

In the third quarter of last year Ford's net earnings were $959m. Earnings per share fell to 53 cents from 78 cents a year earlier.

"The decrease in earnings of $71 million is more than explained by the impact of Firestone's ongoing tyre recall," Ford said in a statement.

"Without the Firestone tyre recall, profits would have been a record in the third quarter."

Revenues rose to $40.064bn from $37.28bn a year earlier.

The recall crisis is already thought to have cost the chairman of Firestone's Japanese parent company Bridgestone his job.

Masatoshi Ono resigned due to ill health.

Admitting responsibility

At US Senate and House hearings in September Mr Ono, who is also a Bridgestone executive vice president, accepted personal responsibility for the tyre recall crisis.

US investigators recently said they were widening their probe to look at Firestone's light truck tyres.

The US House of Representatives has also passed laws under which motor industry officials can be jailed for hiding fatal safety problems.

The recall crisis is expected to cause Firestone's annual sales to drop by $1.3bn, including $350m in lost sales to Ford.

Bridgestone is one of the world's biggest tyre makers along with Michelin of France. Each held a 19.4% global market share by volume in 1999.

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See also:

11 Oct 00 | Business
Executive resigns after tyre recall
29 Sep 00 | Americas
Fresh Firestone probe launched
19 Sep 00 | Business
Continental recalls tyres
01 Sep 00 | Business
US issues tyre warning
10 Aug 00 | Business
Tyre recall extended to Europe
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