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 # 326  

 February 2001




After False Starts, Ford Motor Company Improves its Defense of SUVs

by Amy Ridenour

 

Little noted amid Christmas and Inaugural festivities was this small bulletin out of the Ford Motor Company's headquarters in Dearborn: The giant automaker announced that it was recalling about 110,000 Explorer and Mountaineer sport utility vehicles (SUVs), not because of problems with tire safety or suspension but because a device meant to keep drivers from exceeding 106 miles per hour could malfunction. The problem was discovered, Ford said, during its ongoing review of 148 deaths and more than 300 injuries linked to failures by certain Firestone tires, once standard issue on Ford's popular SUVs.

The December mini-recall, which exposes Ford to legal action, was not a step that Ford had to take. The fact that the company chose to take it anyway sends consumers a powerful message about the importance Ford places on full disclosure, and on reassuring the buying public that its vaunted Explorer has been vetted and fly-specked for safety far beyond a reasonable doubt.

After some false starts, the company now seems to grasp that what matters most in the Explorer/Firestone flap is not whether the courts say Firestone is to ultimately to blame. It's what the court of public opinion decides about Ford's ultimate trustworthiness.

It was not always thus.

Firestone acted in early August to recall 6.5 million of its suspect tire models. The federal government's auto safety arm had begun an inquiry in May. But the tire company moved only after news reports from a Houston television station suggested that the tires might have a tendency to separate at high speeds.

Ford's response was to argue that it had been kept in the dark and was also Firestone's victim.

"This is a tire problem," an angry Jacques Nasser, Ford's chief executive officer, told a congressional hearing in September. "Ford did not know there was a defect with the tires until we virtually pried the claims data from Firestone's hands."

At first blush, Ford would seem to have a right to feel aggrieved. Tire warranties, for instance, are traditionally maintained by the tire companies themselves, not the manufacturers who put them on their vehicles.

Firestone, with a history of costly recalls and lost business, had motive to keep Ford in the dark about tire failures aboard Explorers in South America and the Middle East.

But in the hands of skilled counsel, such facts can easily be spun as negligence by Ford. Add to that Ford and Firestone's historical closeness. The companies have been business partners for 95 years, since the dawn of America's Auto Age. The close relationship continued even after Japan's Bridgestone acquired a foundering Firestone in 1988.

The flap quickly descended into an exercise in finger-pointing, which did little to relieve the buying public's growing anxiety about the Explorer's overall safety.

Meanwhile, the Ford name suffered. Soon, the small but vocal group of professional SUV haters joined the hunting party, determined to shift the debate from tire safety to a referendum on the Explorer's right to exist.

Abetted by their friends in the plaintiffs' bar, and by a willing media, they used selective leaks from court records to cast a shadow over the Explorer, which in its 10 years of existence has arguably become Ford's wheel horse, accounting for eight times the profit per unit than the company's sedans.

Lost in the hubbub is the fact that the Explorer has the best crash-survivability record of any pickup-based SUV.

According to accident data compiled by the federal government's Fatal Analysis Reporting System (FARS), Explorers, are, in fact, not only safer overall than other comparable SUVs - but safer than most passenger cars as well.

FARS data for the period 1991-1999 - the decade during which SUV sales boomed - show there were 1.1 deaths per million vehicle miles traveled (VMT) in accidents involving the Ford Explorer. The figure for other compact SUVs was 1.3 deaths per 100 million VMT; and for passenger cars, 1.5 deaths per 100 million VMT.

Ford, to its credit, didn't rest on its laurels when the Firestone tread separation crisis erupted. The company had to shift gears quickly, and it did. The question, the company grasped, was not "who's fault is it?" but "what are you gonna do?"

The company took principal responsibility for replacing tires - replacing more than six million in total. It suspended Explorer production until that job was done, taking a $500 million hit. It added tires to its vehicle warranty, which makes it possible for Ford to monitor claims in order to discover early warnings of future trouble. It announced plans to offer optional tire-pressure sensors on Explorers starting this fall. It mounted internal reviews and promptly announced recalls. Ford publicly welcomed the federal government's expanded review of the problem, due out in February, and advertised its cooperation.

And it moved quickly to settle more than 100 lawsuits already filed, without worrying whether Firestone was on board.

Ford's new warranty coverage on tires installed on new Ford, Lincoln and Mercury cars and trucks, a move designed to improve safety and ease customer concerns, breaks with a century-old tradition in which tiremakers repaired or replaced defective tires and automakers covered all other parts of a vehicle. "We now stand behind every component in our vehicles," Ford chief executive Jacques Nasser said in a statement.

Ford will pay for the replacement of defective tires at no charge for three years or 36,000 miles for Ford and Mercury vehicles, and four years or 50,000 miles for Lincolns.

Tire companies will reimburse Ford for some of the warranty costs. Ford is following rival GM, which has been covering tires with its bumper-to-bumper warranties since 1996.

Clearly, there is room for criticism. Ford might have moved more quickly on some of these items.

Dr. Clotaire Rapaille, a psychologist who helped Ford choose the Explorer's name 10 years ago, says it was meant to suggest "outside, exterior, exploration."

Truer words have never been spoken. The Explorer/Firestone flap has carried Ford into some murky precincts - corporate responsibility, franchise protection, full disclosure. There, the footing is uncertain and the ground often shifts.

The evidence is that Ford has explored the terrain, gained traction and is ready to move forward - all four wheels on the ground. For fans of Ford's SUVs, this news is welcome indeed.

# # #

Amy Ridenour is President of The National Center for Public Policy Research, a Washington, D.C. think tank. Comments may be sent to [email protected].




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