POLITICIANS AND LIABILITY LAWYERS ALREADY ARE sinking their teeth into the crisis that is the Bridgestone-Firestone/Ford Motor Co. tire recall. But grandstanding senators and blood-thirsty trial attorneys aren't the most important concern for these two companies.
The most critical concern and the one with the longest-term negative effect - on both the Firestone and Ford brands and the companies themselves - is a lack of trust.
So far, 88 deaths and 1,400 accidents have been linked to problems with Firestone 15-inch, ATX, ATX II and Wilderness AT SUV tires, most made in Decatur, IL. Tires seem to be failing with the tread separating from the tire at high speeds in high temperatures.
Firestone recalled 6.5 million of the SUV tires Aug. 9.
Since then, Ford and Firestone dealers have been scrambling and working overtime to replace the suspect tires.
"We can't get enough tires, even other brands," says John McLaughlin of McLaughlin Ford in Royal Oak, MI. "We're doing 500 tires a month and we could do more if we could get the tires."
Mr. McLaughlin adds that he has a long list of Explorer owners who are waiting for replacement tires to come in. They have 24 hours from the time of the call to get service or risk going to the bottom of the list.
"I think Ford is doing everything it can to resolve the situation," says the dealer. "I just hope this doesn't hurt our relationships with customers."
Initially, Firestone and Ford appeared to be doing the right recall thing. Informative web sites were set up to keep customers informed of developments. Ford President and CEO Jacques Nasser went on television in advertisements telling customers and the American people that the company was doing all it can and wouldn't rest until every recalled tire is replaced.
All the while, reporters and congressional investigators were looking into the case. What they've uncovered could spell trouble for both Firestone and Ford.
When Mr. Nasser and Bridgestone-Firestone CEO Massatoshi Ono testified before a Senate committee, they were adamant that they didn't know about the tire problems until just prior to the recall.
Mr. Nasser says Ford didn't know about the problems until "we pried the information out of Firestone" in July of this year.
Documents uncovered last month indicate that Ford knew in early 1999 that its Explorers were riding on suspicious rubber and that Firestone knew of the perils three years before that.
The documents in question were written in January of 1999. They were penned by two Ford executives in different countries, Saudi Arabia and Venezuela. In Venezuela, 46 deaths were attributed to the tires.
Bridgestone Corp. apparently had 1,500 SUV tire-related legal claims dating back to 1997.
In the short term, this situation is costing Firestone millions. The recall and related fiasco will mar Ford's third quarter. It stopped building the hot-selling Explorer for several weeks to help tire makers catch up with demand. Experts predict an after-tax hit of $200 million or 10 cents a share as a result of the recall.
Another short-term concern affects Ford Motor Credit, which reportedly has some 6,000 off-lease Explorers wearing suspect tires sitting in lots around the country. They can't be re-marketed until they get replacement tires. They certainly will be last on the list of priorities.
For now, besides the inconvenience, dealers appear largely unaffected by the recall.
"There are a lot of extra tires laying around," reports Mr. McLaughlin. "But it's not hurting sales at all. The SUV is terrific and always has been."
But what if the evidence holds up and both companies are found guilty of reacting too slowly to a safety concern or, worse, of covering up the flawed tires? Both companies will lose the trust of not only American consumers, but consumers around the world.
And if that happens, dealers also will be hurt.
People will think twice or three times about putting the safety of themselves and their families into the hands of a company who allegedly misled the public about a critical safety issue with one of its products.
And Americans have long memories. They used to trust their President. Then Lyndon Johnson misled the American people about how the U.S. was faring in the war in Vietnam. Then Richard Nixon sponsored the cover up of a bungled break in of Democratic headquarters at the Watergate Hotel in order to hide other campaign sins.
Now, instinctually, we make elected officials prove they are telling the truth about important and not-so-important issues.
Even in the auto industry, there are examples of companies having difficulties overcoming safety-related adversity. It took Audi a decade to recover from its unintended acceleration crisis. And that was bogus to begin with.
One tire ad says, "A lot is riding on your tires." Well, a lot is riding on this tire recall.
