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The Ford Firestone Probe

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Business Ethics Research Paper - Fall 2009

Business Ethics Research Paper - Fall 2009

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  • superior industries made all of the aluminum wheels for the fords that crashed,was not the tires or the vehicle,ford and firestone were paid 1 billion each to take the rap. i was hired to find and repair the fault at the van nuys plant.when i wanted to release this info my family and myself were threatened. these wheels were cracked before shipping.Tr.
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  • 1. 2009 Business Ethics BUSA 573-001 The Ford-Firestone Probe: An Ethical Stand 21 By: Andy Andrews November 1, 2009 Brian Finlay, Instructor University of Tennessee at Chattanooga
  • 2. Ford Motor Company and Firestone have enjoyed a long and prosperous business relationship that dates back to 1896 when Henry Ford purchased tires from Harvey Firestone. Despite emerging as a leader in the tire industry, Firestone has faced several crises related to the safety of its tires on Ford vehicles. By 1973, Firestone grew to be the second largest tire manufacturer in the U.S. However, financial and safety issues for Firestone began shortly after Ford requested that Firestone switch to the newly developed steel-belted radials, Firestone 500, for its 1974 trucks and cars.2 In 1978, Firestone recalled 14.5 million tires after excess application of the adhesives binding the rubber and steel resulted in 500 tread separations and blowouts. In May of 2000, the National Highway Traffic Safety Administration (NHTSA) opened an investigation into Firestone’s second tread-blowout incident leading to the largest and deadliest tire recall in U.S. history. On August 9, 2000, Firestone voluntarily recalled 6.5 million Firestone 15" ATX, ATX II, and Wilderness AT tires. "Firestone and Ford killed more people than the Oklahoma City bombing," said Dale Query, whose son Patrick was killed in Brevard County in 1999."14 This case involved a number of ethical concerns, including product safety and liability, government regulation, engineering ethics, consumer access to production information, and internal business practices. To better understand these ethical concerns surrounding Ford Motor Company, Firestone, and the National Highway Traffic Safety Administration (NHTSA), a fact based chronological approach has been organized. Whether or not Ford, Firestone, or the National Highway Traffic Safety Administration (NHTSA) accepts any responsibility for over 250 wrongful deaths claimed from the 2000 tire tread-blowout crisis, they all failed to conduct superior business ethics by not upholding its moral, ethical, and legal obligations to its stakeholders. 2
  • 3. FORD The Ford Motor Company, based in Dearborn, Michigan, manufactures automobiles and it was founded by Henry Ford in 1903.1 Ford’s code of ethics or values, as stated in its 2004 annual report, states “We’re proud to be a company with family-based values. We believe that strengthens our competitive advantage“.11 During the 2000 tire blowout case, Ford failed to practice their code of ethics or values. Including law suits, class action suits filed by the state, recall costs, and regulation compliance costs, the recall ended up costing Ford $2.5 billion dollars.15 As data show, Ford was nearly unaffected, in market share and stocks, by the losses it took from the 2000 tire recall so its market rebound was nearly instantaneous.15 As it will be revealed through five design flaws, Ford owns some moral, legal, and ethical responsibilities with the Ford Explorer design for the 2000 tire tread-separation crisis on account of design flaws. The Design Flaws Ford developed its first sport utility vehicle (SUV) in 1966 called the Ford Bronco. Although Ford initially marketed the Ford Bronco (1966-1977) as a small four-wheel-drive utility truck, it was later defined as a compact SUV under the newly released name Ford Bronco II. In 1984, the Ford Bronco II was released as a compact SUV and it was designed to use the same Twin Traction I-Beam suspension in the front end as that of the Ford Ranger pickup truck. The Twin Traction I-Beam suspension is a hybrid suspension comprising of a solid axle that pivots around the differential and uses coil springs instead of leaf springs and it was originally designed for trucks and not SUVs. The Twin Traction I-Beam offers a higher degree of control and comfort for both on and off road usage; however, it sacrifices wheel travel and is notorious for faulty alignment. The Ford Bronco II was prone to rollovers and by 1987 there were 43 rollover fatalities. In 1989, the NHTSA opened a formal study of the Ford Bronco II but later closed the investigation based upon data in four states showing that the Ford 3
  • 4. Bronco II’s rollover rate was similar to that of other SUVs.5 However, Ford engineers would later acknowledge that the Ford Bronco II was simply too top heavy for the designed Twin Traction I-Beam suspension; therefore, forcing itself over in hard turns. The engineers recommended design changes for the Ford Bronco II but those recommended changes were ignored by management. Through documentation, Ford showed that they were aware of this design flaw but found it less expensive to hire a team of lawyers to prepare for the oncoming lawsuits before releasing the vehicles than it was to pay for a costly redesign. The Ford Motor Company ended up having over 800 lawsuits filed against the Ford Bronco II due to rollovers incidents.2 It would later be replaced in 1990 by the Ford Explorer and marketed as a spacious, safe, and reliable four-wheel-drive vehicle for the family. In order to cut production and design cost, Ford’s engineers designed the Ford Explorer to use the same suspension truck frame as the Ford Ranger pickup truck and Ford Bronco II that resulted in over 800 lawsuits and 43 fatalities. Ford made the Explorer more than 600 pounds heavier than the Ranger; however, it did not upgrade the suspension and tires to carry the bigger load.16 As a result, the Ford Explorer had its first documented design flaw. As early as 1987, the Ford Explorer prototype, code-named “UN46”, indicated rollover and stability concerns in tests.6 Consumer’s Union test reports in 1988 indicated that the Ford Explorer had an even greater tendency than the Ford Bronco II to lift two wheels off of the ground going 55 miles per hour in a turn. The Ford Explorer actually performed worse than the Ford Bronco II in a sharp “J-turns” test where the Ford Explorer rolled in 5 out of 12 tests. This obvious was a concern to Ford engineers. On June 15, 1989, Ford’s engineers suggested several design changes to improve the Ford Explorer’s stability design in a memo addressed to Ford’s management. These design changes included lowering the engine for better center of gravity placement, replacing the Twin Traction I-Beam suspension, mounting the wheels two inches farther apart, lowering the tire pressure, and stiffening the springs. On the basis of not delaying the 1990 launch date for the 4
  • 5. Ford Explorer, Ford’s management declined the design changes of lowering the engine for better center of gravity placement, replacing the Twin Traction I-Beam suspension, mounting the wheels two inches farther apart. However, they did approve design changes that would not affect the launch date such as lowering the tire pressure, shortening the suspension, and stiffening the springs. When the Ford Explorer production began in early 1990, Ford was already at work on a redesigned suspension version for the '95 model. The second design flaw came when Ford’s engineers redesigned the Twin Traction I-Beam suspension in 1995 with a light weight and more carlike independent front suspension in order to improve stability but failed to lower the position of the engine. Ford’s management decided not to exploit the opportunity to lower the center of gravity by repositioning the engine on the Ford Explorer in order to minimize redesign costs and preserve high profit margins as stated in a 1990 Ford memo.7 As a result, the vehicle’s center of gravity would slightly increase due to its light weight design without lowering the position of the engine; thus, decreasing the vehicle’s stability.2 By not optimizing the vehicle’s center of gravity, tire selection for the Ford Explorer would become an important factor. The third design flaw was when Ford failed to capitalize on improving the Ford Explorer’s stability by not selecting a more suitable tire for the Ford Explorer. In September of 1989, Ford’s engineers determined that the P235/75R15 Firestone tires were not the best designed tires for the Ford Explorer on the basis of rollover tests; however, the tires were chosen to be used on account of cost reasons. The test results concluded that the P235/75R15 Firestone tires had a significant chance of failing while the P225/75R15 Firestone tires were stable during the rollover test.9 Although the tires were designed specifically for the Ford Explorer, they were in essence passenger rated vehicle tires to have an off-road look. The P235/75R15 Firestone tires were rated for an inflation pressure of 25-35psi per tire. However, Firestone normally recommended 30-35psi. 5
  • 6. The fourth design flaw came about when Ford’s engineers changed the tire inflation specifications prior to the releasing the Ford Explorers for production in March of 1990.7 In an effort to help the Ford Explorer’s stability problems, the engineers at Ford changed the tire pressure specification from a targeted value of 32 psi (30-35 psi) to 26 psi. An inflation pressure of 26 psi was at the low end of the safety margin of 25-35psi for the P235/75R15 radial ATX tires. The change in tire pressure specification was approved by Firestone. In fact, Firestone claimed that their testing revealed no issues even at the lower pressures that Ford was then considering. As inflation pressure decreases, the more the tire flexes around the sidewall. The more tire flexing, the greater the heat is produced within the tire through increased frictional forces. Passenger rated tires are temperature rated as grade A, B, or C (Federal Motor Vehicle Safety Standard No. 109) with grade A being the least vulnerable and grade C being the most. The Firestone AT tires were C rated. By selecting the lowest grade level and setting the inflation pressure to 26 psi, Ford was subjecting the Firestone tires to temperature conditions that the tires were not designed for. Another design factor of tire damage is excessive vehicle load. Depending upon the model, the Ford Explorer had a modest payload of 750-1,310 lbs. A payload of this design would be easy to exceed with cargo and passenger loading; thus, placing even greater stress on the tires. After setting the tire pressure to 26 psi, Ford went ahead with its decision to use the Firestone P235/75R15 ATX tires on the Ford Explorer.9 The Ford Explorer roughly loses 1,100 pounds of carrying capacity at 26 psi so the margin of error is small. By decreasing tire inflation and increasing the Explorer’s payload, Ford’s engineers would affect the overall fuel economy of the Ford Explorer. Once the Ford Explorers had reached the market, tests revealed that the fuel economy for the Ford Explorer was less than satisfactory due to the lower tire pressures.2 The only solution to improving the fuel economy was to decrease the rolling resistance of the tires. There were only three options available to the engineers at Ford for decreasing the rolling resistance: the tires could be made to 6
  • 7. incorporate special materials, the tires could be made lighter, or the inflation pressure could be increased. Increasing the inflation pressure was considered to be unacceptable because it would reverse the fix that was made earlier to improve the Ford Explorer’s stability problems and incorporating special materials into the tires would interfere with the tire traction as well as increase product cost so it was unacceptable as well. Therefore, Ford’s engineers quickly decided to lighten the weight of the tires. The engineers at Ford immediately started working with Firestone in implementing the new change. The first change required a 3% reduction in tire weight; thus, forcing a name change from Firestone ATX to Firestone ATXII. The final change occurred in 1994 where the total tire weight reduction went from 3% to about 10% per Ford’s instructions; thus, forcing another name from Firestone ATXII to Wilderness AT. All of Firestone’s modifications involved removing material from several of its key components, including the belt wedge. This final design change, requested by Ford, brought about the most influential design flaw and added to the many ethical issues that Ford exposed during the 2000 tire tread separation/blowout case. Ford’s Ethical Issues Ford knew that it had design flaws within the Ford Explorer associated with the 2000 tire tread- separation crisis. Although this paper addresses several design flaws that Ford was responsible for, Ford would take its stance in the 2000 tire-separation case as “it’s a tire problem and not a vehicle problem”.6 The problem with this stance is it is analogous to saying “it’s an engine problem and not a vehicle problem” when in fact an engine problem is a vehicle problem. One must keep in mind that Ford not only used, assembled, and sold the Firestone AT tires but they revised and dictated many of the specifications that Firestone used in designing the tires on account of the stability issues associated with the Ford Explorer. After all, it’s a known fact that tires are an integral part of a vehicle’s design and operation. Therefore, Ford evidently knew it had a design issue with the Ford Explorer and its tires years 7
  • 8. before the crisis unfolded in 2000. Although Ford does not provide warranty against tires, Ford received hundreds of credible claims, 148 claims for tread separation, for defective tires between 1991 and 2000. 13 In a memo written on January 28, 1999, a Ford official in Dubai, United Arab Emirates, warned Ford executives of a growing problem with the tires and urged an investigation to find out why consumers were losing their treads and causing rollover accidents.12 When Firestone declined to replace the pre- 2000 tires, Ford began replacing them in August of 1999 on nearly 50,000 vehicles in 16 foreign countries. However, this recall was never reported to U.S. authorities until the NHTSA opened an investigation into the Firestone tires in May of 2000. Facing a possible cover-up, Ford pledged to NHTSA authorities that Ford would immediately reveal all foreign recalls to U.S. regulators.13 Ford also failed to report to the NHTSA of the lawsuits and notices of intent to file involving at least 35 fatalities and 130 injuries. The Ford documentation revealed in this case only proves that Ford failed to conduct superior business ethics by not upholding its corporate, engineering, public, and legal obligations to its stakeholders. From an ethical point of view, there is no doubt based upon utilitarianism that Ford failed the public by not upholding its corporate, engineering, and legal obligations. The ethic of care that Ford exhibited was unjust and unfair; therefore, affecting the outcome of many Ford cases through distributive, retributive, and compensatory justices. In addition to, Ford’s engineers, like all engineers, have a legal, moral, and ethical obligation to the public to ensure that all engineering designs are safe and will not harm the welfare of the general public. The engineers at Ford failed to uphold their oath by proposing design options to Ford’s management that later reduced the factor of safety related to the ATX tires and Ford Explorer; therefore, leading to tire failures and fatalities. Although Ford owns some moral, legal, and ethical responsibilities with the Ford Explorer design for the 2000 tire tread-separation crisis, Firestone, also a major contributor, shares equal if not greater ethical responsibilities. 8
  • 9. FIRESTONE Firestone has been in the business of manufacturing tires since 1900 when Harvey Firestone founded the Firestone Tire & Rubber Company in Akron, Ohio.3 In 1990, Firestone was acquired by Bridgestone USA, Inc., a subsidiary of Tokyo-based Bridgestone Corporation for $2.6 billion.4 In August of 2000, Firestone voluntarily recalls 6.5 million Firestone 15" ATX, ATX II, and Wilderness AT tires that were manufactured at the Firestone Decatur plant. Firestone’s code of ethics or values, as stated in its 2001 annual report, states “The core concepts are trust and pride: the trust that we earn from customers and from everyone in the community. And the pride that we feel in earning that trust“.10 It will later be shown that Firestone failed to practice their code of ethics or values in the 2000 tire blowout crisis. Including law suits, class action suits filed by the state, recall cost, and regulation compliance costs, the recall ended up costing Bridgestone/Firestone over $1.3 billion dollars.15 After the recall, Bridgestone/Firestone’s shares plunged from about $24 a share down to $9 a share.9 It would take Firestone only 18 months to fully recover from the losses of the 2000 recall as well as to stabilize its market share and stocks.15 As it will be revealed through design flaws and a faulty process, Firestone owns some moral, legal, and ethical responsibilities with their 15" ATX, ATX II, and Wilderness AT tire designs for the 2000 tire tread-separation crisis on account of faulty designs. The Design Flaws The first tire design flaw came about when Firestone agreed to redesign, by reducing the tire weight, the ATX tires in an effort to gain 1.6 mpg for the newly released Ford Explorer.7 One of the major key components that had to be redesigned in order to meet the tire weight reduction specified by Ford was the belt wedge. Therefore, Firestone narrowed the tire’s belt wedge to reduce its weight. This narrow wedge did not adequately resist the initiation and propagation of belt-edge cracks between the steel belts. Although other design options were available, such as using a nylon cap/bandage, that would 9
  • 10. not sacrifice the tire’s separation integrity after reducing the belt width, Firestone decided not to pursue the design options on account of additional cost. The redesigned ATX tire generated high stresses and heat in the wedge and belt area. This design change was obviously a decision based upon inadequate field testing and engineering analysis that did not take real-world situations into consideration with lower tire inflations. The second notable tire design flaw was when Firestone allowed Ford to change the inflation pressure specification from 30 psi to 26 psi. Firestone should have mandated that Ford stay within its engineering design specifications. Although Firestone approved the change in inflation specifications for the Ford Explorer, they noted it as one of the contributing factors within their root cause analysis “Low inflation pressure in the recalled ATX, ATXII and Wilderness AT tires increased the running temperature of tires and would contribute to a decreased belt adhesion level.”16 It is evident from the data presented that Firestone did not perform due diligence in conducting the proper engineering analysis and/or testing during its design evaluation process. In addition to the tire design issues, Firestone would manufacture the tires using a faulty process. Manufacturing of Faulty Tires For the second time in Firestone’s history, the plant located in Decatur, Illinois was once again responsible for manufacturing faulty tires. By August 9, 2000, the Firestone’s Decatur plant had manufactured 14.4 million Firestone 15" ATX, ATX II, and Wilderness AT tires with only 45% (6.5 million) of the tires recalled, voluntarily by Firestone, due to the tread-separation crisis.7 It would later be learned that Firestone hired unskilled and untrained workers during a 1994-1996 strike. During this timeframe, most of the faulty tires were manufactured at the Firestone’s Decatur plant. Firestone’s root cause analysis revealed that the manufacturing processes at its Decatur plant reduced the cohesion level of the rubber within the belt wedge area; therefore, permitting cracks to propagate between the steel 10
  • 11. belts. The faulty process exposed many ethical issues for Firestone during the 2000 tire tread separation/blowout case. Firestone’s Ethical Issues Firestone also knew it had both design and manufacturing flaws associated with the 2000 tire tread-separation crisis. Although this paper addresses several design and manufacturing flaws that Firestone was responsible for, Firestone would take its stance in the 2000 tire-separation case as “It’s a vehicle problem and not a tire problem and insisted that consumers were to blame for driving the Ford Explorers on underinflated tires”. The problem with this stance is that Firestone knew years before the crisis occurred that it had an issue with the AT tires. In a 2000 memo, Firestone revealed in its 1999 vs. 1998 Adjustment Data that the Wilderness tire tread-separations increased by 194%. There were three reports released from 1998, 1999, and 2000 to congressional investigators that show unusually high rates of tire failures from the ATX II tires. As shown in the 1999 report, most of the tires that were recalled represented the majority of the company’s claims in 1997 and 1998. The 1999 report also indicated that the Decatur plant had an issue due to fact that more than half of the claims were related to that plant. The tire manufacturer insisted that it had only known since July of 2000 that the Decatur plant was the primary source of the problem. However, financial records going back three years indicated that the company had been compiling and analyzing data regarding the tread-separation issue. Firestone’s stance on compiling the data was that it was only for assessing the company’s financial liability and the data was not shared with the company’s safety engineers.13 According to the Venezuelan government, Firestone and Ford failed to add, after promising to do so for the Venezuelan market, what is called a nylon cap ply, a fifth layer of added protection in new tires, to prevent tread separation and other hazards. Firestone tires for the Venezuelan market are manufactured at a Venezuelan plant. Firestone not only failed to add the nylon cap but it went as far as stamping a label on the tires indicating that a 11
  • 12. safety precaution had been taken.17 The paper trail that Firestone left behind only proves that they failed to conduct superior business ethics by not upholding its corporate, engineering, public, and legal obligations to its stakeholders. From an ethical point of view, there is no doubt based upon utilitarianism that Firestone also failed the public by not upholding its corporate, engineering, and legal obligations. Distributive, retributive, and compensatory justices also played a role with Firestone cases. In addition to, Firestone’s engineers had a legal, moral, and ethical obligation to the public to ensure that all engineering designs are safe and will not harm the general welfare of the public. The engineers at Firestone failed to uphold their oath by not using proper test conditions when giving design recommendations to Ford regarding their ATX tires; therefore, leading to tire failures and fatalities. Although Firestone owns some moral, legal, and ethical responsibilities with its 15" ATX, ATX II, and Wilderness AT tire designs for the 2000 tire tread-separation crisis, NHTSA must also be held accountable with ethical responsibilities. NHTSA NHTSA was founded in 1970, after passage of the Highway Safety Act of 1970. Its roots actually go back to the National Traffic and Motor Vehicle Safety Act of 1966, the Highway Safety Act of 1966, and the Motor Vehicle Information and Cost Savings Act of 1971. As NHTSA proclaims in its mission statement, the agency's main focus is "to save lives, prevent injuries and reduce traffic-related health care and other economic costs." Therefore, it has moral, legal, and ethical responsibilities to the general public. As such, the NHTSA functions as both an information source and an investigatory body. Its responsibilities fall into three main areas: research, information and education, and funding other research. For research, NHTSA has the most impact and visibility. The NHTSA conducts independent crash testing of many new vehicles then scores them using a five star rating. Vehicles for testing are bought directly from car dealers in order to avoid receiving vehicles from manufacturers that are 12
  • 13. prepped or reinforced for better NTHSA scores. Due to budget, the agency cannot test every vehicle. The agency’s crash test program includes rollover, front-impact, and side-impact testing. The crash testing program plays a vital role as a watchdog of vehicle safety for consumers. It is also responsible for regulating fuel economy standards as well as investigating manufacturer defects. As for information and education, the NHTSA is responsible for safety related information to the public. The NHTSA publishes annual accident statistics that are collected every year that reports on fatalities, injuries, speeding, and alcohol related incidents within the U.S. The NHHSA also funds internal studies on child safety seats, teen driver programs, and new safety technologies. The NHTSA also has the responsibility under its mission statement to fund state and local safety research programs as well as safety studies conducted at local universities through grants. Since the NTHSA is fully funded by American tax dollars, it has an obligation to serve the common good. Although the agency played a key role in the 2000 Ford-Firestone controversy, it also owns some moral, legal, and ethical responsibilities for the tire tread-separation crisis on account of public relations. After the Ford-Firestone crisis, a new transportation bill, The TREAD ACT, was passed and the NHTSA’s budget increased by $9 million dollars following the 2000 Ford-Firestone tire recall crisis.9 As it will be revealed through NHTSA’s flaws, NHTSA owns some moral, legal, and ethical responsibilities with their involvement for the 2000 tire tread-separation crisis on account of faulty designs. NHTSA’s Involvement On May 2, 2000, NHTSA opens an investigation, investigation number PE-00-020, of 47 million ATX, ATX II, and Wilderness Firestone tires with over 90 complaints reporting 27 injuries and 4 fatalities.7 In the 2000 Ford-Firestone case, only six of the 600 staff members who work for the federal highway agency would investigate the case fulltime.14 Prior to 2000, there were no laws that would require companies to disclose any safety defect information to U.S. authorities so neither companies 13
  • 14. disclosed any tire defect information.9 Memos show that lawyers for both Firestone and Ford grew concerned that the U.S. authorities might see the actions as evidence of a safety defect. Therefore, Firestone was reluctant to turn over information to the government on account of the information falling into the hands of plaintiffs’ attorneys.18 As a direct consequence of hearings before the Committee on Energy and Commerce on safety of Firestone tires, the Transportation Recalled Enhancement, Accountability, and Documentation (TREAD) Act was enacted on November 1, 2000. NHTSA’s involvement in the 2000 tire blowout case showed that there were ethical issues within the agency. NHTSA’s Ethical Issues There are several ethical issues on NHTSA’s behalf regarding the 2000 tire tread-separation crisis. The first issue was when the NHTSA failed to discover the 2000 tire defect because it lacked a proactive program to discover safety defects and it ignored early warning signs. On July 22, 1998, NHTSA receives an email from a State Farm Associate Research Administrator, Samuel Boyden, stating that they had claims of over 21 Firestone ATX P235/75R15 tire failures causing injuries. The problem was dismissed by NHTS.7 NHTSA also failed with the Ford Bronco II. There were over 43 rollover fatalities in 1987 compared to only 8 for the Suzuki Samurai. Due to the fact that four states showed that the Ford Bronco II’s rollover rate was similar to that of other SUVs, the NHTSA closed the investigation and later declined to reopen it. The NHTSA has never set a limit on how unstable a vehicle may be. Regardless of not being adequately staffed, funded, or capable of fully investigating every complaint, the NHTSA had plenty of warning signs leading up to the Ford-Firestone crisis that would have prevented lost lives or at the very least allowing NHTSA to reevaluate its safety, accountability, and documentation standards. 14
  • 15. The second issue is the lack of legislation. Without legislation, the NHTSA has no authority to assure that manufacturers obey the law. After the 1978 Firestone tire recall, the Carter administration made some proposals to tighten federal tire standards. However, the proposals were not revised and implemented. To reduce the burden on a troubled American auto industry, the Reagan administration canceled the plans proposed by the Carter administration for more stringent tests and for mandatory devices to warn motorists when their tires became underinflated.20 It took losing over 250 lives and over 800 injuries to finally have the U.S. government to adopt legislation (TREAD Act) to protect consumers. From an ethical point of view, there is no doubt based upon utilitarianism that NHTSA failed the public by not upholding its regulatory obligations. NHTSA had a legal, moral, and ethical obligation to the public to ensure that all regulations and standards were met by automobile and tire manufacturers. NHTSA also failed to follow up on numerous of complaints that could have led to an early investigation and possibly saving many lives. In addition to, NHTSA failed to set regulations and standards based upon accurate test methods. In essence, the NHTSA could solely be ethically responsible by failing to analyze the warning signs from field reports. Although NHTSA owns some moral, legal, and ethical responsibilities with its regulatory issues for the 2000 tire tread-separation crisis, preventive measures must be put into place to keep this type of incident from ever reoccurring. Preventative Measures To prevent this type of crisis from reoccurring, strong legislation must be adopted so that the NHTSA can enforce the regulations and standards set forth for automobile and tire manufacturers. Without these legislations, the NHTSA cannot hold the automobile and tire manufacturers responsible for their designs and actions. In addition to, the NHTSA cannot fail to analyze field reports regarding any type of accident. As for the automobile and tire manufacturers, they must adopt and practice strong 15
  • 16. ethical and core values within engineering and management to avoid future issues from occurring. With today’s global markets, manufacturing companies and the government must work together to set standards in order to avoid catastrophic issues from occurring. In conclusion, the cornerstone of an ethical corporate culture is based upon its code of ethics or conduct. Concern for stakeholders like shareholders, customers, and the general welfare of people can be expressed in a values-based statement of management's commitment to society. With today’s global and technology markets, intangible values like trust are critically important. The fact of the matter is that Ford, Firestone, and the NHTSA failed to react sooner to consumer reports regarding the early tread separations versus its concern of a wide spread out issue. One would have to contend either the left hand didn’t know what the right hand was doing or somebody was intentionally being misleading. It’s obvious that Ford's slogan of "Customers Are Job One" has failed to sufficiently influence its decisions. Ford and Firestone simply failed to put customer safety first in an attempt to save money for shareholders. From a utilitarian standpoint, Ford, Firestone, and the NHTSA failed consumers. Ford failed by not placing a warning label on the Ford Explorers alerting consumers that the tire inflation pressures could not ever drop below 26 psi without possible safety issues. Firestone did not perform due diligence in conducting the proper engineering analysis and/or testing. The NHTSA failed to analyze the warning signs from field reports. All three failed in their cost-benefit analysis to its stakeholders. By not accepting any moral responsibility for the wrongful deaths of over 250 people, Ford, Firestone, and the NHTSA have failed to conduct superior business ethics by not upholding its public obligations to society. 16
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