Chuck Huhman

1
vs.

• Chuck Huhman
• EMGT 314 - Mgmt. For Engineers
• Firestone Wilderness AT Tires,
• An engineering failure

Slide 1
2
Background

• Automobile Manufacture
• Motto?
• Quality is Job 1! (pre-2000)
• Customer is Job 1! (post - 2000)
• Introduction of newer automobiles
• Minivan in 1980s
• Sport Utility Vehicle (SUV) - Explorer

Slide 2
3
Background

• Tire manufacturer
• Motto
• Best Today - Still Better Tomorrow." (pre-2000)
• Making it Right., Building Trust. (post 2000)
• Serves several markets
• Cars, Light-trucks, and SUVs
• Commercial Trucks
• Agricultural
• Earthmoving
• Motorcycle

Slide 3
4
The Problem, a Timeline.

• 1998-2000 - Ford replaces Explorer tires in
  foreign countries, claims US market ok.
• May 2, 2000 - NHTSA opens investigation.
• August 2000 - Ford/Firestone voluntary recall of
  Decatur Plant tires.
• September 1, 2000 - NTSB forces recall of 1.4M
  tires.
• October 10th, 2000 - Masatoshi Ono resigns as
  Firestone CEO.
• May 21st, 2001 - End of 100 year relationship.

Slide 4
5
.Lets Get Ready to Rumble!
Slide 5
6
Fords claims

• Firestone is at fault. No question.
• The Ford Explorer
• and the Mercury
• Mountaineer are
• safe SUVs.

Source Dept. of Transportation
Slide 6
7
Firestones claims

• Ford is at fault.
• Wilderness ATs
• are comparable to
• competitors tires.
• Wilderness AT
• tires have extremely low claims rates.
• A tread separation is not always a tire defect.
• The Explorer must also be investigated.

Slide 7
8
Firestone Management
"Business relationships, like personal ones, are
built upon trust and mutual respect. We have come
to the conclusion that we can no longer supply
tires to Ford since the basic foundation of our
relationship has been seriously eroded."
-John T. Lampe, chairman, CEO and president
of Bridgestone/Firestone, Inc.
Slide 8
9
Ford Management
"We are deeply disappointed that upon hearing and
seeing this analysis of Firestone Wilderness AT
tires that Firestone decided not to work together
for the safety of our shared customers, which is
the only issue that matters. -Jacques Nasser
Ford President CEO
Slide 9
10
Code of Ethics?

• Both companies deny allegations, Ford takes
  action, Firestone does not.
• Companies disagree on how to convey news to
  public - with or w/o hearing, QA.
• Firestone aware of problems since 1994, in
  foreign countries.
• Firestone admittedly increases production of
  tires in question to dilute failure rates.
• Both companies historical data different from
  that of NHTSA holdings.

Slide 10
11
Analysis

• Do not look at financials to determine if a
  consumer product should be recalled.
• Do not rely on Govt. to force recall.
• Customer is just as important a stakeholder as
  the stockholder is.

Slide 11