Management Mistakes and Successes, Tenth Edition

Chapter 21. Ford Explorers with Firestone Tires: Ill-Handling a Killer Scenario

A product defect that leads to customer injuries and deaths through manufacturer carelessness constitutes the most serious crisis that any firm can face. In addition to destroying brand reputation, ethical and social responsibility abuses are involved, and then legal and regulatory consequences. Managing such a crisis becomes far worse, however, when the manufacturer knew about the problems and concealed or denied them.

The case in this chapter is unique in that two manufacturers were culpable, but each blamed the other. As a result, Firestone and Ford were savaged by the press, public opinion, the government, and a host of salivating lawyers. Massive tire recalls destroyed the bottom line and even endangered the viability of Bridge stone/ Firestone; sales of the Ford Explorer, the world's best-selling sport-utility vehicle (SUV), plummeted 22 percent in April 2001 from the year before, even as domestic sales of SUVs overall climbed 9 percent.

A HORROR SCENARIO

Firestone tires mounted on Ford Explorers were linked to more than 200 deaths from rollovers in the United States, as well as more than 60 in Venezuela and a reported 14 in Saudi Arabia and neighboring countries. A widely publicized lawsuit took place in Texas in the summer of 2001. It was expected that the jury would determine who was most to blame for the deaths and injuries from Explorers outfitted with Firestone tires.

Ford settled its portion ...