MNGT 59107 MAY 2012

PRESENTED BYCody LewisJosh Pa lmerBr ian R i ley

CASE STUDYFIRESTONE’S TIRE

RECALL

OVERVIEW

Case Study BackgroundRegulations and Laws InvolvedIssue at HandCase Analysis

CASE STUDY BACKGROUND

Firestone Tire and Rubber Company and the Ford Motor Company Harvey Firestone and Henry Ford

The Millionaire Club Partnership formed in 1906

The Tire Industry Plagued by recalls to include

Tread separation Improper inflation and installation Bead flaw Exposed belt wire

CASE STUDY BACKGROUND

Attention on Firestone Turbulent times Tread separation leads to death In 1978, largest tire recall in history

In 2001, the Partnership Ends http://www.youtube.com/watch?v=wdxiglfVpKQ OR http://www.youtube.com/watch?v=BhFTw5QvyvY

The Case Study Firestone tires Ford Explorer

VS

REGULATIONS AND LAWS INVOLVED

Tort Case Definition: A civil wrong other than a breach of

contract Criminally liable for negligence

Damages Settlements for those injured

ISSUE AT HAND

Who’s at Fault Firestone with their tires? Ford with their Explorers? Both?

Civil Lawsuits Who pays damages What is the appropriate punishment

ISSUE AT HAND

Who’s at Fault Question 1: Does the company owe a duty to it’s customer?

Firestone Ford

Question 2: Did the company violate that duty? Firestone Ford

Question 3: Did that violation cause harm to the customer? Firestone Ford

Question 4: Was the harm foreseeable? Firestone Ford

ISSUE AT HAND

Firestone Does the company owe a duty to it’s customers

Supply a quality tire that is safe Manufacturing processes meet standards Duty to bring up issues that are in violation

Did the company violate the duty Covered up tire quality issues Decatur Plant Covered up tire tests

Did the violation cause harm Blowouts caused around 250 reported deaths

Was the harm foreseeable Industry records verify that tread belt separations

ISSUE AT HAND

Ford Does the company owe a duty to it’s customers

Supply quality automobiles that are safe Manufacturing processes meet standards

Did the company violate the duty Failed to verify their suppliers products (i.e. Firestone)

are safe Did the violation cause harm

Rollovers played a role in the reported deaths Was the harm foreseeable

Ford had data that indicated, “… little to no margin for safety in top-speed driving at 26 psi.”

CASE ANALYSIS

Do what extent do companies need to make a proactive effort to evaluate safety concerns?

What mistakes did Ford, Firestone, and NHTSA each make early on in the crises?

What possible ethical implications when accepting responsibility versus blaming others?

Suggest measures that Firestone could take to improve tire quality in the future

CASE ANALYSIS

Do what extent do companies need to make a proactive effort to evaluate safety concerns? In 1972, the US enacted the Consumer Product Safety

Act Power to issue recalls and develop safety laws

Companies should not only meet the standards Consulting companies that specialize in quality assurance

Every company owes a duty

CASE ANALYSIS

What mistakes did Ford, Firestone, and NHTSA each make early on in the crises? All three failed to adhere to warning signs

Issues with tires, tire pressure, and customer complaints Firestone has the majority of the responsibility

Faulty manufacturing plants Analysis that identified problems Employees who brought up issues

CASE ANALYSIS

What possible ethical implications when accepting responsibility versus blaming others? Unethical decisions can cause negative impacts

Company loses creditability and maybe their customer base

Public opinion Legal issues

Ethical decisions will have less of an impact Public opinion Strong customer base Attractive company to those looking for work

CASE ANALYSIS

Suggest measures that Firestone could take to improve tire quality in the future Three step approach

1) Reinvest in manufacturing plants Retrofit their plants with state of the art equipment

2) Product testing Responsible to perform extensive testing

3) Quality assurance department Coordinate with the product testing department

Culture change Educate employees the importance of quality,

regulations, and empower them to point out problems