New fire on tire recall
Firestone, Ford blame each other; stiffer penalties, regulations urged
NEW YORK (CNNfn) - Officials of Bridgestone/Firestone Inc. on Tuesday made their clearest acknowledgment yet of defects in their tires linked to 88 U.S. deaths and expanded their recall, but they also said the design of Ford vehicles may have contributed to the fatal accidents.|
At a hearing before the Senate Commerce Committee in Washington, the Japanese tire supplier and the No. 2 automaker were pressed by lawmakers about when they knew there were problems with the tires. Transportation Secretary Rodney Slater also testified that Congress needs to give federal safety inspectors expanded powers if it wants to prevent a repeat of the Firestone case.
Meanwhile Tuesday, a House panel that held its own hearings on the recall last week threatened to subpoena Ford and Firestone documents about tire tests if both companies did not release them by Friday.
Bridgestone/Firestone executive vice president John Lampe told the Senate panel that the company accepts responsibility for tire defects, but said problems with the Ford Explorer sport/utility vehicle combined to play a role in the accidents.
"We acknowledge there are safety problems and defects in a small percentage of the tires made in our Decatur [Illinois] facility," he said.
But, "we firmly believe that the tire is only part of the overall safety problems in these accidents. Tires will fail and they do fail for a number of reasons. In most cases, the driver can bring the vehicle under safe control."
He said the popular Ford Explorer had a bad record on rollovers, and that most of those accidents did not involve tire failures. He also said Ford's recommendation for a lower tire inflation pressure in the recalled tires is part of the problem that needs to be examined.
Federal safety regulators have identified at least 88 deaths in the United States that they link to tire failure on Ford vehicles, primarily the Explorer. Another 46 deaths on Ford vehicles in Venezuela have been linked to the tires.
On Aug. 9, the companies announced a recall of 6.5 million ATX, ATX II and some specific Wilderness tires made by Firestone and found primarily on Ford vehicles. About two million of those tires already have been replaced.
On Tuesday, Lampe said the company has now decided to replace up to 1.4 million tires that were not included in the original recall but were part of a "consumer warning" from NHTSA. If a customer prefers to replace the tires with a competitor's product, Bridgestone/Firestone will reimburse customers up to $140 per tire.
The company previously had said it would inspect tires covered by the consumer warning and replace them only if problems were detected.
Jac Nasser, Ford's chief executive, disputed Bridgestone/Firestone's claim that Ford vehicles were partly responsible for any accidents or fatalities, reiterating the company's stance that the problem is "a Firestone tire issue -- not a vehicle issue."
"Almost three million Goodyear tires on Ford Explorers have not had a tread separation problem," he told the committee, in a follow-up to his appearance before another congressional panel last week.
Sue Bailey, the administrator for the National Highway Traffic Safety Administration (NHTSA), said the agency is focusing on the tires as the root cause of the accidents, but did not rule out that the vehicles could be at least partly at fault.
Bridgestone's Lampe admitted the company should have analyzed its claims data to discover the tire problem sooner, and Ford ended up conducting the claims data analysis that led to the recall. He said Firestone conducted other tests and analyses of tire performance when problems were first suggested by overseas recalls and lawsuits, but they did not detect the problem.
"The mistake we made is we never used claims data as a measure of tire performance," he said. "We have no excuses."
Firestone, Ford agree broader recall not needed
One area of agreement between the companies was their belief that a broader recall of tires, called for by some safety advocates, would do more harm than good.
"There's not much point in replacing good tires with good tires, and it would get in the way of replacing bad tires," Nasser said.
Officials of both companies said they would support legislative proposals that would require reporting of overseas recalls. Senators criticized Ford in particular for recalling Firestone tires in 16 countries before the U.S. recall was announced.
"The American consumer is not chopped liver," said Sen. Max Cleland, D-Ga. "We ought to know about these things."
Firestone spreads blame to accident rate of Ford Explorers - Sept. 11, 2000
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Nasser said Ford would notify U.S. authorities of any overseas recalls in the future, even before any legislation is passed.
"From this point forward, when we know something, so will the world," Nasser said. But he said the automaker had been assured by Bridgestone/Firestone that the overseas problem was due to different use in those countries, and that there was no evidence of U.S. problems in its records.
"Last week, I listened in disbelief as senior Firestone executives not only acknowledged that Firestone had analyzed its claims data, but also identified significant patterns of tread separations as early as 1998. Yet, they said nothing to anyone, including Ford Motor Co.," Nasser said. "If I have one regret, it is that we did not ask Firestone the right questions sooner."
McCain says enough blame to go around
The chairman of the hearings, Sen. John McCain, R-Ariz., said he was not looking to fix blame. But he added, "When manufacturers fail to tell the truth or purposely neglect to report safety data, and people lose their lives, severe penalties must result."
McCain turned some of his criticism toward Congress. He and other committee members blasted a recent appropriations bill that included a clause that prevented the Transportation Department from enacting a vehicle rollover standard.
"The fact is we all share the blame equally when the system fails," he said in his opening statement.
Sen. Olympia Snowe, R-Maine, said the gag orders put in place in court settlements on early cases of tire failures were especially troubling.
"Others purchased the products and lost their lives because of [gag orders]," she said.
Bridgestone's Lampe said the company sought gag orders only on the amount of awards and trade secrets, not the finding of fault in tire failures.
Slater, who appeared before the committee after skipping last week's hearings, said the department would submit legislation to raise civil penalties, give regulators greater access to company claims and warranty information, and require testing of products by manufacturers, as well as notification of overseas recalls.
Outside the hearing, Rep. W.J. "Billy" Tauzin, chairman of the House subcommittee on telecommunications, trade and consumer protection, said the panel has written to Ford and Firestone asking them to produce documents about tests on the tires by Friday. If lawmakers do not comply, the documents could be subpoenaed, the Louisiana Republican said.
A Ford spokeswoman, Ann Doyle, said the company has already provided thousands of documents and will provide whatever additional data the legislators request.
"We have already supplied 70,000 documents. I can't imagine there is something that we haven't supplied," she said. But, she said, "We are certainly going to comply with everything."
Bridgestone did not immediately respond to a request for comment.
Ford accused of slow action on ignition problem
In a separate matter, The New York Times reported Tuesday that Ford was aware of growing problems with an ignitions systems part throughout the 1980s and 1990s but did not provide data on the problem to federal regulators.
The system would shut down if it got overheated and the car would stall, according to the report. The newspaper said Ford was aware of growing problems with the system, but that it told regulators who were investigating the matter that it did not know of any defect with the part.
On Aug. 30, a California judge said he was ready to order the automaker to recall about 2 million vehicles with the alleged defect. But a Ford lawyer, Warren Platt, told the newspaper that there were many possible causes of cars stalling that were beyond problems with the ignition system
Doyle told CNNfn the company believes it fully complied with requests for information from NHTSA over the alleged defect and has recalled about 1 million 1984-85 model year vehicles found to be at risk of ignition problems.
"We always err on the side of giving NHTSA more information than less," she said. "Our policy is to comply fully and to go beyond."
Auto analyst Gary Lapidus, of Goldman Sachs, played down the Times report.
"I would be very surprised if Ford Motor Co. willfully would have done anything to put customers at risk," he said. "In hindsight these things always look obvious ... [but] I suspect it wasn't clear to them until recently that they really had a problem. Frankly I think that's a similar situation you have with the Firestone tires." (AIF449KB) (WAV449KB)
Shares of Ford (F: Research, Estimates) closed Tuesday at $25.12, down 88 cents, while shares of Bridgestone Corp. closed up 50 yen (47 cents) to 1,158 yen ($10.92) in Tokyo.