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Ford Growing Frustrated with Firestone

DETROIT — Ford Motor Co. (F.N) executives have grown increasingly frustrated with the way Firestone has handled the probe and recall of its tires, which are being investigated for their role in at least 46 traffic deaths.

The No. 2 automaker, on whose vehicles most of the tires are used, publicly stood by Japan's Bridgestone Corp.'s (5108.T) U.S. division. Ford executives, however, privately said it took the tire maker too long to get them the data that showed the problems with the 15-inch ATX, ATX II and Wilderness tires.

Firestone last week recalled 14.4 million of the tires, about 6.5 million of which are still in use.

The recalled tires, many of which have had their treads peel off, in some cases had insurance claims and lawsuits filed against them at 10 times the rate of the company's other tires, according to data Ford and Firestone released on Sunday.

"Frankly, do you always make the right decisions? I don't know,'' Firestone vice president Christine Karbowiak told Reuters on Monday.

"Maybe 20 years from now, when they're doing studies of this (recall) in Harvard Business School they may say the company should have done this, or might have done that differently. But at the time, we were making what we thought were the right judgements.''

Also driving Firestone executives is fear over how the recall and mounting publicity could affect the tire maker financially. A 1978 recall, the largest in U.S. history, pushed the company into bankruptcy and paved the way for its acquisition by Bridgestone.

On Monday Standard & Poor's lowered its long-term corporate credit rating on Bridgestone, with further downgrades possible. The credit rating agency also cut the short-term corporate credit rating on the company and the commercial paper rating on the Firestone unit.

Consumer groups and plaintiffs' attorneys have said Firestone and Ford knew of the problems earlier than this year but took no action. They called again on Monday for the recall to include 16-inch tires, which had similar problems overseas.

Last year in North Africa, the Middle East, southeast Asia and South America, Ford replaced more than 46,000 tires -- mostly the 16-inch models, because of lost treads and blown tires. Ford and Firestone have said the recall of the 16-inch tires in the United States is unnecessary, however, because usage patterns overseas are different.

Firestone's data showed a spike in claims and lawsuits against the recalled tires in the 1996 to 1998 period, but Karbowiak said the actual number of claims were extremely low and not above normal. The real surge came this year, she said.

Most of the recalled tires were made at the company's Decatur, Ill., plant from 1994 to 1996, when replacement workers were used during prolonged labor problems, including a 10-month strike. The Washington Post reported on Sunday that former workers at the Decatur plant said in court depositions Firestone cut corners on quality control at the factory.

Karbowiak said all the plant's workers were properly trained and the comments were made by "disgruntled'' former employees. She added that all possible causes of the lost treads and blowouts were being looked at, including looking again at manufacturing processes, the company's design and Ford's specifications for the tires.

Consumer complaints earlier in the year caused the U.S. National Highway Traffic Safety Administration (NHTSA) to open an investigation into the tires in early May. But Ford vice president Jason Vines said Firestone did not share its data with the automaker until July 28, after it used company-owned Cray supercomputers to analyze the numbers.

Ford officials told Reuters one reason for the delay was negotiations about confidentiality. Firestone would not share its data with Ford, after doing so with NHTSA, out of fear that the tire maker would lose its right to keep documents secret, an important consideration in light of the numerous product liability lawsuits it faces.

On Sunday Ford and Firestone explained that problems with the recalled tires first appeared on 16-inch Wilderness models in Saudi Arabia and the Middle East in the spring of 1999, followed by 15-inch versions in South America last summer. A study in the southwest United States of both sizes of Wilderness tires ended in April with no conclusions.

But Ford executives said a Houston television station startled them in February with reports that ATX tires were dangerous and another study was launched that has not yet ended.

They said they have been frustrated with Firestone's inability to inform the public properly which tires were being affected by the recall.

The automaker also sent public relations executives to Firestone's Nashville, Tenn., headquarters to help with the public information campaign.

Concern about how the public would view Ford vehicles -- many of which include Firestone tires that have not been recalled -- led the automaker to take out ads in such major daily newspapers as USA Today, the Wall Street Journal and the

Washington Post on Friday and Sunday to alert Ford owners which vehicles were affected.

The effects were being seen as consultant CNW Marketing Research found in a survey that almost 5 percent of people intending to buy Ford Explorers said they "definitely'' would not purchase the SUV as long as it was fitted with Firestone tires. Another 11 percent were seriously considering another brand specifically because of safety concerns over the tires.

Nevertheless, Ford officials said Firestone's tires were ''world class'' and they would continue to use them, extending a relationship that dates back to 1906. But they added that, even if they wanted to switch, the world's other top tire makers did not



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