Ford and Firestone's Tire Recall: The Costliest Information Gap in History, case study
FORD AND FIRESTONE'S TIRE RECALL:
THE COSTLIEST INFORMATION GAP IN
•Palash Goyal - 2014 MBA-15
•Founded by Henry Ford in
• Global auto Manufacturer.
• Owns many automotive brands
including Ford, Mercury,
Lincoln & Volvo.
•Founded by Harvey Firestone in
• Acquired by Bridgestone tires, a
•Supplies tires for various
company began in
2000 sets of tires
About the case……
Firestone weakened by 1978 tire recall.
In may, Bridgestone took over Firestone
and saved them from bankruptcy due to
Bridgestone/Firestone ATX, ATXII and
Wilderness AT tires were being used on
the Ford Explorer. 4
In March, Bridgestone/ Firestone sent
a confidential memo to Ford.
In August, Ford announced a recall in
16 foreign countries, but not in US and
NHTSA not notified.
In 1992, Ford started to receive
complaints regarding the Firestone tires.
Tread Separation occurs when the rubber tread
begins to separate from the steel belts inside the
tire. This occurs because it is hard to adhere
rubber to steel. Tread Separation becomes more
likely at high speeds and in warmer climates.
What is Tread Separation?
•After being informed of numerous complaints,
NHTSA (National Highway Traffic Safety
administration) met wit Ford and Firestone to
discuss a plan of action.
•On august, Bridgestone/Firestone inc. issued a
recall of 6.5 million tires.
•The recall was 90% completed in December.
•Firestone released a memo to Ford dated March 12,
1999, in which Firestone expressed "major
reservations" about a Ford plan to replace Firestone
•Ford CEO Nasser testified before a joint congressional
hearing that "this is clearly a tire issue and not a vehicle
•Ford said it was under no obligation to report overseas
•Ford did not have warranty data on tire recalls.
•Firestone’s damage claims moved to
Nashville; warranty adjustments in Ohio
•"Trend identified after-the-fact by the New York
•Department of Transportation doesn’t have
funding to track all data.
•NHTSA: “our testing is clearly outdated”
Yoichiro Kaizaki, the president and chief executive of the
Bridgestone Corporation, resigned in January.
May 22, 2001—Bridgestone/Firestone
ended its 100-year relationship as a
supplier to Ford, accusing the
automaker of refusing to acknowledge
safety problems with the Explorer.
Which company was responsible???
that Ford should
The NHTSA found that Firestone was
responsible for tire separation.
Crisis in information management…
The information was available, but it was not easy to
get at and it was not shared.
Role of databases and data management…
There were several isolated databases.
There were no easy ways to detect trends.
There were no ways to share data (Ford had to “pry”
information from Firestone).
Not all data collected.
•There was not an environment of information
•Not all parties were collecting the correct data.
•No one was proactive about looking into problems.
•Both Ford & Firestone were responsible.
There should be implementation of information system.
There should be environment of information sharing within
the organization and between the parties.
Need to be PROACTIVE not reactive!
Better trend analysis
Causes of problem should be identified, than corrective
action must be taken.
Data that is collected should be used effectively