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Case Analysis Ford and Firestone

In: Business and Management

Submitted By jmvance
Words 3611
Pages 15
Case Analysis Report
In August 2000, Ford Motor Company and Firestone Tire Company recalled 6.5 Million ATX and AT tires that had been installed on Ford’s Explorer model SUV. At the time, it appeared as though Ford and Firestone were doing the right thing. They had found out that the tread separated on Ford Explorers in states with intense heat, such as Florida and Texas. However, it later came to light that both Ford and Firestone had known about these problems earlier than 2000 and that Ford had even had a similar recall in 9 countries the previous year. Firestone however had disagreed with the recalls prior to 2000. Many of these countries were in the Middle East where temperatures are frequently in excess of 100° Fahrenheit.
The Stakeholders
There are numerous stakeholders in this case some, such as Ford and Firestone by not being forthright with the consumer had a lot to gain and others such as the consumers had a lot to lose.
Ford Motor Company
Ford Motor Company is one of the largest stakeholders in this case. They had the most to gain from selling the Explorers and not publicizing the potential problems with Firestone tires. By issuing a recall, they would lose both money and customers if the public thought their SUVs were unsafe.
My problem with Ford is that they knew that there was a problem with the Ford Explorer before it went into production. Ford engineers recognized that by using the larger P235 tire, there was a potential for more rollovers. Ford chose to go with the larger P235 tire over the P225 tire. Ford also commissioned their engineers to come up with ways to increase the stability of the SUV prior to production. The engineers came up with 4 ways. The first was to widen the chassis by 2 inches. The second was to lower the engine, the third was to lower the tire pressure and the fourth was to stiffen the springs. Ford…...

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