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Personal Finance
Report: Ford eyes recall
May 18, 2001: 6:17 p.m. ET

Ford officials may seek broader Firestone tire recall due to new data analysis
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DETROIT (CNN) - Ford Motor Company will not confirm or deny a published report Friday that says the automaker has identified safety problems with several Firestone tire brands and may demand Bridgestone/Firestone, Inc. expand its recall of 6.5 million Firestone tires.

An article in the New York Times quoted three anonymous sources who said Ford statisticians uncovered the problems a month ago while reviewing data on many brands of Firestone tires on several different types of vehicles.

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Sales of Ford's 2002 Explorer have gotten off to a slower than expected start, and an analyst said those sales won't be helped by another Firestone recall.
The data showed the safety concerns are not as serious as those which prompted Firestone's voluntary recall of 6.5 million Wilderness, ATX, and ATX II 15-inch tires built at the company's Decatur, Ill., plant, according to the anonymous sources. Most of the recalled tires were original equipment on Ford Explorer sport utility vehicles.

The National Highway Traffic Safety Administration is continuing its investigation of the tires involved in that recall. As of February of this year, NHTSA data shows failure of the recalled tires, most on Ford Explorers, are associated with 174 deaths.

Two of those sources also added that Ford is planning to make a decision on whether to request an expanded tire recall by the end of May.

Ford says it is cooperating in investigation.

Ford spokesperson Mike Vaughn would not comment on the report, but would say Ford is continuing to work with NHTSA in its investigation of the Firestone recall.

"NHTSA has an open investigation, and we are cooperating fully," said Vaughn.

Tim Hurd, a spokesperson for NHTSA, would only say Ford has been continually working with the government agency in its investigation and has been reviewing tens of thousands of documents and data.

When asked if a recall was being held until NHTSA had a new administrator in place, Hurd said, "That's pure nonsense."

In a statement issued Friday, Bridgestone/Firestone said its tires are safe and that problems with tires cannot be looked at without addressing the vehicle's role as part of the equation.

"A thorough analysis of our data does not indicate the need for a larger recall," read the statement. "It is difficult to understand why that company (Ford) would choose to go to the media and not review their data and analysis first with Firestone."

Since last summer, Ralph Hoar, director for Safetyforum.com, has been pushing Firestone to expand its recall to include all 15 and 16-inch Wilderness, ATX, and ATX II tires, not just the 15-inch tires manufactured at Firestone's Decatur plant.

He said he hopes Ford is planning to push for a larger recall.

"It's an acknowledgment by Ford that they are bad tires... that intrigues me," said Hoar.

Rod Lache, an auto analyst who tracks both Ford and Firestone for Deutsche Banc Alex. Brown, said a new recall would not be good news for either company, but the amount of damage would be determined by the amount of attention a recall would receive in the media.

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Click here for a look at Ford-Firestone recall special report

"If this becomes the story of the day for the next week or two, I believe it will impact both companies because it would put further doubts on those brands," he said. "If this blows over as not as big an issue because there are no deaths at this time, I don't think consumer perceptions will be all that affected."

Lache said Firestone has recovered some, but sales are still off 20 to 30 percent from year ago levels. Tire maker profits are also being squeezed by higher oil prices, as oil accounts for about half of raw material costs for tires.

Lache termed Ford's launch of its newly-designed 2002 Explorer to be disappointing so far, pointing out that it has already been forced to offer and then raise incentives on the vehicle that started hitting dealer showrooms in March.

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But Lache said most of the problems stem from Ford holding back on shipping the new sport utility vehicle until it had produced 70,000 of them, as it worked to assure the new model didn't have any quality problems. That created a glut at many dealers, rather than the tight supply that accompanies many new models.

He also cited growing competition from other sport/utility vehicles, including the Ford Escape, a smaller, less expensive SUV that debuted last year. He said the Escape is cannibalizing some of the Explorer sales, and that the other manufacturers also have new SUV offerings with their own incentives.

"There are a confluence of factors making it tough to roll out a new product in the segment, he said. "I think last year's recall is only a minor factor, on the margins. But all we need is another Firestone recall to bring it to the front of the news."

Ford began allowing buyers and dealers to choose the tires for the 2002 Explorer. Lache said about 90-percent of its Explorer customers are choosing Goodyear or Michelin tires, while the remaining ten percent are picking Firestone. graphic





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.