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Ford Orders Recall of Firestone Tires

Aired May 22, 2001 - 17:01   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FRANK SESNO, CNN ANCHOR: We're going to go to the White House in just a moment, but I understand this news conference with Ford Motor Company is about to begin. So let's listen in.

WILLIAM CLAY FORD JR., CHAIRMAN, FORD: ... and the safety of their tires.

I'm very proud of the matter in which our Ford team has analyzed and come to this decision. We will continue to operate in a way that is open, accountable and responsible for our actions.

I along with the rest of the board of directors have been involved in and support this decision.

Finally, as I'm sure you might guess, this decision is a painful one for me personally. The history between Ford and Firestone really goes back to the beginning of the two companies and to my two great- grandfathers, Harvey Firestone and Henry Ford.

But this -- this decision reflects our fundamental commitment to our customers. And because of that, this decision is really an easy one for me and for our board of directors and the management of this company.

Our bond with our customer is only as good as the trust between us. It's the core of who we are as a company.

And now I would like to introduce Jack Nasser to explain more details of our action -- Jack.

JACQUES NASSER, CEO, FORD: Thanks, Bill.

Once again, thank you. Bill, I agree that the core value of the Ford Motor Company is our commitment to our customers and to their safety, and it's also our responsibility to make sure that the tires that are on Ford Motor Company vehicles perform safely.

Last year, as you all know, Firestone recalled certain Firestone ATX and Wilderness AT tires there were on our vehicles. There were about 6 1/2 million tires in total.

We supported that recall based on the best available information that we had at that time. And we also made a pledge to our customers. We essentially said three things at that time: We said we would engage in an intensive effort to determine how to prevent serious and unacceptable tire problems such as those that were experienced last year. We also promised that any action we took would be based on the best available data from scientific testing, field experiences, and any other sources that were available. And I'd say, most importantly, we said that as soon as we knew more about these tire, we would let our customers and the public know. We have kept those pledges.

At the time of last summer's recall, we did not have any data that suggested any unusually high levels of tread separation with the nonrecalled Wilderness AT tires. Nevertheless, we continued our intensive examination of these tires, and as part of this effort we've been working very closely with the National Highway Traffic Safety Administration, NHTSA, and we also established an early warning system to help us identify any future potential tire problems and to identify those problems at the earliest possible point.

Now the purpose of this investigation was very simple: We had to be certain that the tires on our vehicles were as safe as possible for our customers. Pure and simple. That's the only motivation that we had.

The investigation process has been very thorough and the issues are obviously very complex, because the way in which tires work, or fail, are very complicated also. And importantly, there probably isn't a single factor taken in isolation that can determine whether a tire is safe.

Our research came in three basic areas: the analysis of tire performance in the field. In other words, we went to real-world data, what happens on roads and highways around the U.S. In addition to that, we used information on competitive tire performance that was provided by NHTSA, and we did our own technical testing and analysis.

Now, what did we learn? The first thing and probably the foremost is that Wilderness AT tires on the road today, those tires that were not recalled, perform substantially better on our vehicles than the tires that were recalled last year and that had failures. In general, if you were to look at the tires that we're now proposing to recall, they are substantially better than the tires that were recalled last year, and the failures, when they come, occur in a latter stage of life. In other words, they last longer as well.

However, it wasn't just the testing that alone that led us to act. We also, from the most recent field data that was provided to us by Firestone about two weeks ago, we started to see actual reported failure rates for the Firestone Wilderness AT tires. We started to see those failure rates trend upwards.

From data recently shared by NHTSA, we also learned that the on- road failure rate of competitive tires that are comparable by different manufacturers were significantly lower than many of the Firestone Wilderness AT tires that were not recalled last year.

Ultimately, through the combination of field data, real-world data, NHTSA information, and our own technical analysis, some of these tires were sending us early warning signals about future problems. And on behalf of our customers, we will not ignore these early warning signals. We said we wouldn't last year, and we're keeping that pledge.

And based on the information that we now have, we feel that it is our responsibility to act immediately. This is what we said we would do, and our customers, as Bill mentioned, look to us to ensure the safety of every element of their vehicles. And that's why the Ford Motor Company will replace all Wilderness AT tires on our vehicles.

We simply do not have enough confidence in the future performance of these tires keeping our customers safe. It's as simple and as basic and as fundamental as that.

And this is not an insignificant undertaking. The cost to the Ford Motor Company on an after-tax basis will be more than $2 billion, but of greater concern to us is the inconvenience to our customers. That's what really drove us: the safety and comfort of our customers.

And it must also be emphasized that this is a precautionary and preventive step. Some of the tires that we're replacing in this recall do not have a substantial risk of failure. They just don't. In fact, we're seeing differing degrees of durability and performance in our own testing and in our own labs, and in the field amongst tires produced at various Firestone plants.

However, rather than try and segregate these tires we are offering to replace all the Wilderness AT tires to avoid any confusion amongst our customers and to eliminate any doubt about the quality of the tires on their vehicles.

What I would like to do at this point is turn the podium over to John (UNINTELLIGIBLE). John is our chief of staff at Ford, but I think more relevant to this...

SESNO: We've been listening to Jack Nasser, the CEO of Ford Motor Company, saying that the company, the motor company will recall -- will replace 13 million Wilderness tires made by Firestone on Ford motor vehicles. The cost of about $2 billion dollars, but Nasser says "as a precautionary and preventive step principally to the protect consumers those who are driving Ford Motor Company. Now, a couple of important points: The relationship between Ford and Firestone goes back almost 100 years, so this separation is far more than symbolic. It involves a very dramatic and deep and long standing commercial relationship and one steeped in tradition as well.

It also reflects a follow-on to the tires recalled last year and those tires, Nasser made clear, were more dangerous than the tires they are now recalling, all of the Firestone Wilderness tires from Ford vehicles. However, he said further testing in cooperation with the government showed early warnings signals of problems down the road: tread separation, that could, of course, lead to more accidents and more potential danger and injury to those driving the vehicles. There will be more details on this story. We will stay with it, of course. And on Web site at cnn.com, you can find out more information about the recall, about where Ford is going and what you, if you're a customer driving on these Firestone Wilderness tires on a Ford vehicle, can do all about it. We're going to take a quick break. We'll be right back after this.

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