Firestone CEO Apologizes for Tire Failures
Firestone’s chief executive formally apologized to Congress on Wednesday for tire failures that have killed scores of people, but the company ran into withering criticism for withholding information that might have saved lives.
Congressional investigators, meanwhile, said they had found more evidence that Firestone had not been forthright. An internal memo from January detailed the cost of tire failure claims dating back to 1989, they said. The costs spiked upward in 1998 and 1999, and 62% stemmed from tires manufactured at a Decatur, Ill., plant that has been identified as a possible source of problems.
The first joint public appearance of the key players in the Firestone drama, Bridgestone/Firestone CEO Masatoshi Ono and his counterpart at Ford, Jac Nasser, provided a demonstration of high-stakes damage control by two global corporations.
“I come before you to apologize to you, the American people and especially to the families who have lost loved ones in these terrible rollover accidents,” said Ono. “I also come to accept full and personal responsibility . . . for the events that led to this hearing.”
Nasser, declaring that “we can’t let this go on,” pledged to develop an industrywide early warning system for safety problems and to share information henceforth with government agencies globally. “From now on, when we know it, so will the world,” he declared.
But the two executives failed to satisfy their questioners. One senator said the Firestone and Ford explanations “strain credulity.” Many lawmakers said they have concluded that the nation’s warning system for alerting consumers to auto safety problems, which hinges on cooperation between manufacturers and federal regulators, is broken and in need of an overhaul.
Not since the 1996 ValuJet crash in the Florida Everglades has an industry--and the federal regulators who monitor it--come under such intense scrutiny.
“We have to ask ourselves why we are in this mess and what can we do to make sure this never happens again,” said Rep. W.J. “Billy” Tauzin (R-La.), who chaired the House hearing.
Challenging Nasser’s assertions that Ford was unaware of any serious problems with Firestone tires on its Ford Explorers, Tauzin produced complaints from the company’s own dealers, some from as early as 1996. “Mr. Nasser,” he chided, “I am an Explorer owner. You don’t have to sell me.”
The hearing marked the first attempt by Congress to grapple with the policy implications of the Firestone recall. Lawmakers said reforms could range from criminal penalties for auto companies that fail to report problems, to upgrading 30-year-old tire safety standards that predate radials, to launching a major federal effort to reduce the risk of rollover crashes for sport-utility vehicles. Sorting out the ideas and enacting some of them into law could take months.
Last month, Firestone voluntarily recalled 6.5 million 15-inch ATX, ATX II and Wilderness AT series tires used mainly on Ford’s Explorer SUV.
The companies had known of problems with the tires for several years, but did not alert federal safety agencies. Even as Ford was recalling tires last year on vehicles sold overseas, American consumers were being killed in crashes attributed to failures of the same tire models.
Ken Johnson, a spokesman for Tauzin, said the newly discovered January memo undercuts the tire maker’s claims that it was unaware of a potential defect. “The document confirms our suspicion that Firestone officials knew they had a serious problem long before they began a recall,” he said.
Even pro-business Republicans were chagrined.
“It’s obvious to me there was a concealment of information that should have been brought out to the public,” said Sen. Richard C. Shelby (R-Ala.), who is regarded as an ally of the auto industry in battles with federal regulators.
Safety Agency Also Gets a Scolding
Officials at the National Highway Traffic Safety Administration also received a stern tongue-lashing for ignoring repeated efforts by State Farm Insurance to warn them of problems as early as 1998.
“The federal government’s highway safety watchdog apparently was asleep,” said House Commerce Committee Chairman Thomas J. Bliley (R-Va.).
The agency began an inquiry in May after television station KHOU in Houston reported on a number of Explorer rollover crashes linked by the common denominator of a Firestone tire that had lost its treads.
Samuel Boyden, a safety research specialist with State Farm, said in a statement that he had provided NHTSA with more than 70 tire failure cases dating back to 1996. Boyden said he e-mailed the first report to the agency in 1998, and followed up in two telephone conversations the next year.
Newly appointed NHTSA Administrator Susan Bailey said her agency failed to follow up on the State Farm alert because the problem was not recognized as a major one. She said the agency has no record of Boyden’s telephone updates in 1999.
For Ono and Nasser, the congressional appearance was a command performance. When Nasser initially indicated last week that he would send subordinates to answer lawmakers’ questions, a sharp rebuke from Tauzin prompted him to quickly change his mind.
On Wednesday, Nasser sought to distance Ford from what he termed “a Firestone tire issue, not a vehicle issue.” Explorers with Goodyear tires have not experienced similar failures, he said.
The Firestone problem was uncovered only because of Ford’s persistent probing, Nasser said.
“If I have one single regret, it’s that we did not ask Firestone the right question sooner,” he said.
Ono, 63, a courtly Japanese executive, spoke in dignified tones as he struggled with some of his English pronunciations. “I have never made a public appearance like this before,” he told senators, “so I am more than a little nervous.”
Ono said Firestone has not yet been able to identify the fundamental cause of the tire failures. He said the company will retain an independent expert to evaluate all issues arising from the recall.
Ford Says It Got Repeated Assurances
Ford executives testified that the company had received repeated assurances from Firestone that tires used in the United States were not experiencing problems. Firestone believed tire failures in Saudi Arabia, Venezuela and more than a dozen other countries were the result of harsh local conditions and misuse by consumers.
Ford said the problems with tires here came to light only after the auto maker analyzed data that Firestone had submitted to the government on property damage, personal injury and lawsuit claims.
The data showed a high rate of claims for the recalled tire models, and pointed to Firestone’s Decatur, Ill., plant as a possible source of the problem, according to Ford.
Firestone Vice President Gary Crigger told senators that the company had not routinely used lawsuit data to evaluate the performance of its tires. Instead, it relied on testing and reports from dealers.
“None of these indicated any problem with the tire line we were looking at,” Crigger said. “Claims and lawsuits were not part of the performance evaluation. I wish they had been.”
Sen. Arlen Specter (R-Pa.) said he found such explanations “almost impossible to accept.”
Indeed, the company’s January 2000 memo analyzing the cost of tire failure claims seemed to undercut Crigger’s explanation.
In the House, Tauzin lectured Ono and Crigger for their failure to alert NHTSA about tire problems in the Middle East.
“Maybe if you weren’t interested in keeping the facts from the American public, maybe you would have prevented it,” Tauzin said.
Under current government rules, auto companies are supposed to immediately report any defects uncovered in their products. But there is no close daily scrutiny of the industry. For example, NHTSA does not routinely assign inspectors to Ford plants. Voluntary compliance is essential for the system to work.
Sen. Barbara A. Mikulski (D-Md.) said the federal government has as vital a role in overseeing vehicle safety as in preventing an outbreak of deadly disease.
“I don’t know if I’ll ever be exposed to the Ebola virus, but I get in my car every day to drive to the Senate from Baltimore,” she said. “The American people have a right to know about risks and they have a right to know about dangers.”
