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News
Ford: Tire recall 30% done
September 8, 2000: 7:50 p.m. ET

Company extends shutdown of 3 plants; expects higher costs from tire woes
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NEW YORK (CNNfn) - Ford Motor Co. estimates that about 30 percent of the 6.5 million recalled Firestone tires have already been replaced, reflecting a pace somewhat faster than some early estimates of the recall.

But Ford admitted late on Friday that it would extend by one week the shutdown of three assembly plants, which the automaker closed in August in order to divert tires to consumers, after earlier saying the plants would reopen as planned on Monday.

The company revealed the recall progress figure in a Securities and Exchange graphicCommission filing Friday. The filing reiterated earlier statements that the world's second-largest automaker will see its profit suffer as a result of the tire crisis, but said it still did not have an estimate for what that impact will be.

"Although we expect these actions to reduce revenue and increase costs, it is too early to assess their overall financial impact in the second half of 2000," Ford said in the filing.

Officials from tire maker did not have any immediate comment Friday about Ford's filing.

For more than a month Firestone and Ford have been dealing with charges that millions of Firestone 15-inch models of its ATX, ATX II and Wilderness AT tires, many included as standard equipment on Ford sport/utility vehicles and light trucks, are defective and played a part in more than 80 deaths on the road. More than 14 million tires are believed to have a potentially deadly defect.

Shutdown of Ford plants extended one week


The filing comes as Ford was thought to be set to reopen the three plants, located in Edison, N.J., St. Paul, Minn., and near St. Louis, all of which make sport/utility vehicles and light trucks.

The shutdown of the three Ford plants was done to reroute 70,000 tires slated for new vehicles to serve as replacement tires for the recall instead.

"We are monitoring the situation week by week," said Martin Inglis, vice president of Ford North America, in a statement. "We are seeing increased production from Goodyear, Michelin and other tire makers and expect that to grow rapidly in the next week or two. The safety and peace of mind of our customers remain our greatest concerns."

During the shutdowns, plant employees unloaded tires, assembled shipments and delivered replacement tires to nearby dealerships, the company said. This allowed dealership employees to concentrate fully on assisting customers with tire inspections and tire replacements for recalled tires.

graphicThe SEC filing says that there are now 35 class-action lawsuits pending against Ford and 63 personal injury suits related to the recall, which affects tires used primarily on the automaker's sport/utility vehicles.

The filing reiterates previous statements that Ford would bear some portion of the costs of Firestone's recall, but it said that share and cost are also yet to be determined.

Karen Hampton, a Ford spokeswoman, said the filing was made to put Wednesday's congressional hearing testimony by Chief Executive Jac Nasser on record at the SEC, even though there are no new numbers or details available currently. Committees in both the House and Senate are investigating the tire recall, which is blamed for at least 88 deaths in the United States.

Also on Friday, Ford said on Friday it had agreed to share cost of the Firestone tire recall.

Both companies won moral support from U.S. Transportation Secretary Rodney Slater, who said there was no evidence so far they had deliberately misled regulators about deadly tire problems.

Slater, speaking in Miami, said there is no indication "at this point" the No. 2 automaker and Firestone knowingly deceived regulators about Firestone tire failures.

Still, a former lawyer for Ford Venezuela, whose family was involved in a fatal road accident in a Ford Explorer, released documents on Friday he said showed the No. 2 U.S. automaker knew as long ago as 1998 about defects with Firestone tires.

Analysts cut Ford profit estimates


Numerous analysts lowered their earnings estimates for Ford after the company announced plans to shut the plants last month -- although some increased earnings estimates for the fourth quarter, believing the company will recoup some, although not all, of the lost revenue.

Several Ford suppliers have already issued earnings warnings about the current period because of the plant shutdowns. TRW Inc. (TRW: Research, Estimates) warned Thursday evening it would miss third-quarter estimates. Visteon Corp. (VC: Research, Estimates), which was spun off from Ford earlier this year and is the world's second-largest auto parts supplier, issued its warning Aug. 30.

Shares of Ford (F: Research, Estimates) edged up 31 cents to $26.19 at midday Friday. Shares of Bridgestone Corp., the Japanese parent of Bridgestone/Firestone Inc., lost 12.5 percent to an eight-year low in Tokyo, ending at down 155 yen, or $1.48, at 1,110 yen, or $10.57. Back to top

-- from staff and wire reports

  RELATED STORIES

Ford curtails production - Aug. 21, 2000

TRW sees 3Q shortfall - Sept. 7, 2000

Visteon issues 3Q warning - Aug. 30, 2000

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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: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. 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 2018 and/or its affiliates.