Firestone and Ford: the Tire Tread Separation Tragedy

The customers (drivers of Ford) are the number one stakeholders that lost the most. They might not have lost much money or reputations, but they lost the one thing that you can never get back, their life.

Both of these companies were successful, are still around today, and widely known around the globe.

Ford would rather take the cost of the Pinto’s design error to a court decision than admit it cost a certain amount of compensation for injuries or deaths. “In Grimshaw v. Ford Motor Co., 119 Cal. App. 3d 757 (4th Dist. 1981) [1], the California Court of Appeal for the Fourth Appellate District reviewed Ford's conduct in painstaking detail, and upheld compensatory damages of $2.5 million and punitive damages of $3.5 million against Ford.” Each incident had a consequence, they were considering the cost of the company in choosing the cheap way out. Dell chose goodwill because of no major damages done, but put the majority blame on Sony. Ford is willing to take the cost of lawsuits as opposed to negotiating the value because it sets a standard payment amount. Ford is admitting a no

There are a few concerns about harmful behavior of the FMC that should be discussed. A behavior is harmful when it wrongfully sets back the interest of others and has a high risk of harm. Obviously, the gravity of harm in this case is very high being that it is life threatening. Once a consumer has purchased the Pinto and drives it off the lot he is at risk to getting rear ended, and burned to death by a car fire or explosion. Since the weight of this harm is very severe, the low probability of the consumer having an accident doesn’t discount Ford’s unethical behavior. Indeed, driving a Ford Pinto would place a consumer’s life at risk. Also at stake are the interests of Pinto passengers and drivers of other vehicles who certainly are not willing to risk their lives so Ford can make an extra buck. Everyone has an interest in not getting injured or killed. Setting back the interest of consumers isn’t the only thing Ford Motor Company was responsible for.

The grounds for any merger depend on the competitive nature of both firms. If one firm is highly competitive and tries to

Ford has argued for over three decades that The Ford Motor Company is not at fault, but rather the other motorists who happened to rear end the Pinto drivers. Many accuse Ford of rushing the Pinto into production without proper testing leaving a faulty

They have the highest safety ratings because the body is wider, and has a lighter body. They also have the lowest recalls over other high truck brands. Chevy recalls are for lights not working and cause fire risk for leaving the lights running. Ford recalls are are big their steering wheels pop off then their acceleration blows up.

When companies combine/merge the whole objective is to gain new opportunities, gain market share, grow the business, to become more innovative and to improve product offerings, utilizing/sharing the existing resources and data. From the case

1 Data Security: Since the companies have merged this is of prime importance as who gets to access what.

Also another particular difference, was the moral actions the companies committed. In one side we got Pacific Gas & Electric which actions where seen morally wrong by the community. Pacific Gas & Electric actions involved bribery, deceit , deception, and they were being careless for the environment an to the community.

Ford Motor Company and its close ally Firestone Tires faced a serious crisis when many Ford Explorers equipped with Firestone AT/ATX tires rolled over as a consequence of tire failures. In 1999 the first fatalities occurred in Saudi Arabia and not much later similar accidents were reported in Venezuela. Ford immediately reacted by blaming the weather and vehicle owners for under-inflating their tires. However, Ford also began replacing tires. It was not until March 2000 when a Ford Explorer rollover in Texas USA

They have obtained civil consent decrees that will contribute to lower prices and improved quality for such products. In addition, they have also worked with businesses to restructure mergers in order to protect competition in the American marketplace.

Lima was one of Treadway’s best plants in terms of productivity and quality control because it updated its equipment and utilized new technology. However, currently, Lima undergoes dramatic changes: job dissatisfaction and high turnover at the foreman level. Moreover, misfortunes never come singly. The entire manufacturer industry is facing some huge challenges including drastic increase in raw material costs and fierce global competition. The director of human resources in Lima plant, Ashley Wall, intended to analyze the issues and make a action plan to address these problems. Ashley needs to do five steps.

Ford was not in violation of the law in any way and had to make the decision whether to incur a cost to fix the obvious problem internally. There were several options for the fuel system redesign. The option most seriously considered would have cost Ford an additional $11 per vehicle. Under the strict $2000 budget restriction, even this nominal cost seemed large. In addition, Ford had earlier based an advertising campaign on safety, which failed miserably. Therefore, there was a corporate belief, attributed to Lee Iacocca himself, of “safety doesn’t sell”. (2)

Another aspect of the negotiation that could have been changed, resulting in a more effective and symbiotic outcome, would have been the number of years the terms included. If the agreement had, instead, called for an annual or bi-annual renegotiation, then perhaps neither organization would have been prompted to sue. Instead, they may have simply waited out the shorter termed agreement and renegotiated the terms or cancelled the agreement afterwards.