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Ford vs. Firestone: A Corporate Whodunit


Ten months after the recall of 6.5 million Firestone tires on Ford Explorers linked to deadly rollover accidents, the root cause of the safety crisis remains a mystery. Is it merely a case of lousy tires, as Ford Motor Co. (F) claims? Or is the design of the Explorer partly to blame, as Firestone (BRDCY) contends?

In the latest round of allegations, Ford charged on May 22 that it had found damning new evidence against Firestone tires. As Ford hurried to carry out a voluntary recall of some 13 million Firestone tires, an outraged Firestone countered with its own data purporting to show that the Explorer itself is part of the problem. So far, the corporate blame game has created a lot more confusion than clarity. Nor can worried consumers look to the National Highway Traffic Safety Administration--the federal agency charged with getting to the bottom of the dispute--for answers. Its findings are still months away. Who and what to believe in the meantime? Here's a roadmap through the jungle of competing claims.

Last summer, Ford insisted the tires not recalled by Firestone were safe. Now it wants to replace them. Are they safe or not?

Ford concedes many of the tires it is replacing "do not have a significant risk of failure." Yet after comparing the performance of Firestone's Wilderness tires with those of other brands, Ford says it lost confidence in their safety. Why? Ford says the latest batch of claims data it received from Firestone on May 11 showed that the failure rate for Wilderness AT tires was "trending upwards." Ford says its own lab tests, which included chemical analyses, computer modeling, and tire endurance tests, also suggested some tires were indeed more likely to fail over time, usually after three years.

At Ford's request, NHTSA compiled field data on 10 other high-volume, SUV tire lines, made by three different manufacturers. While NHTSA didn't disclose which tire lines it compared, all the other brands typically failed at a rate of only 5 per million. That compares with a failure rate of 15 per million for the Firestones. So, is the latter a significantly worse failure rate? Privately, government investigators say yes. But some experts believe Ford is overreacting. "Ford is being extra careful and cautious," says James Wangers, a senior analyst at Automotive Marketing Consultants Inc., an auto testing outfit in Warren, Mich. "It is as much PR-motivated as it is genuinely good business."

Firestone has yet to respond to the specifics of Ford's take on the NHTSA data. But Firestone defends all tires not recalled last summer. Still, Ford has other ammunition: In the 1995-1997 model years, half of the Explorers Ford produced had Firestone tires; half had Goodyears. Both companies designed their tires to meet the same standards set by Ford. Yet while Firestone has recorded 1,183 tread-separation claims on those tires, Ford says Goodyear (GT) has received only two claims. Firestone says it is unclear whether Goodyear defines a "claim" the same way it does. A spokesperson also notes that Ford's own memos on file with Congress suggest that Goodyear tires may have separated more than the data show. The bottom line: Unless Firestone comes up with more compelling data, Ford's stats don't look good for the tiremaker.

But what about the possibility that the Explorer's design is partly to blame for the tire failures?

Firestone says it has hired an outside expert to conduct an engineering analysis of the vehicle. In the meantime, Firestone says its claims data show that tread separations on the Explorer occur 10 times as often as on the Ford Ranger pickup, which uses the same tires and is built off the same chassis.

But is that a valid comparison? Many experts say no, because the Explorer weighs more and has a higher center of gravity. "It's an apples-to-oranges comparison that has no validity in my opinion," says Brian O'Neill, president of the Insurance Institute for Highway Safety. Nor does NHTSA appear convinced. Considering that the data are one of Firestone's strongest arguments against Ford's design, the tire company has hardly mounted a convincing case so far.

Is there any other evidence that shows the Explorer is more prone to roll over than other SUVs when tires fail?

Hard to say. Crash statistics maintained by the insurance industry and the federal government show the four-door Explorer has a lower rate of fatal rollovers than other SUVs. But no one has yet studied whether a tire failure on an Explorer is more likely to result in a rollover. Firestone has attempted to do that by analyzing crash data in Florida and Texas. By studying tire-related accidents from 1993 to 1999, Firestone concluded that the odds of an Explorer rolling over are greater than that of other SUVs. Of 91 tire-related Explorer crashes in Florida, for instance, 74, or 81%, involved a rollover. In 221 tire-related accidents involving other SUVs, 151, or 68%, involved a rollover. Is that enough of a difference to draw a conclusion? Not so far. "It's entirely possible that there is something about the design of the Explorer that does make it prone to roll over given a tire failure," says O'Neill. "But nobody's come up with a hypothesis to explain that."

Are there other design issues that may be contributing to the increased risk of tire failure or rollover?

Ford considered various engineering modifications to deal with the instability of Explorers during their original design phase in the early 1990s. Instead, it settled on a fairly simple fix: deflating the tires. By recommending the Explorer's tires be inflated to 26 pounds per square inch (psi) instead of Firestone's recommended 30 psi, Ford was able to ensure a more stable ride and reduce the rollover risk.

But that led to another problem. The lower tire pressure increased the friction between the tire and the pavement, resulting in lower gas mileage. So Ford, which was under pressure to meet government fuel economy standards, asked Firestone to make the tires lighter, according to advocacy group Public Citizen. Firestone removed weight from the tires by reducing its rubber and steel components. But that made the tires less durable--and more susceptible to tread separations, say safety advocates. Ford responds that the design, not the weight, determines the strength of the tire.

Ford claims it has made the redesigned 2002 Explorer a lot safer than the ones involved in the roll-overs. So, has the redesign eliminated the safety concerns?

Not really. It's true that the new four-door Explorer, which went on sale in March, is 2 inches wider and has an improved suspension, which makes it easier to handle and less prone to roll over. The vehicle offers numerous safety options, including rollover sensors, side curtain air bags, and electronic stability control. But not all new Explorers have been redesigned. The popular two-door Explorer Sport and the four-door Explorer Sport Trac, a combination pickup-SUV, are still based on the old design. And unlike its four-door sibling, the Explorer Sport already has one of the worst death rates in rollover accidents, according to the Insurance Institute for Highway Safety.

So where is NHTSA in all this? If Ford really has proof that Firestone tires are riskier than others, why isn't it being more aggressive in protecting consumers? And why hasn't it investigated the Explorer's design?

NHTSA has been studying the tire issue since May, 2000, and had promised to wrap up its probe within six months. Now, it's saying it will be finished by the end of summer, at the earliest. Although critics charge that NHTSA is dragging its heels, the agency is hamstrung by Congress, which has starved it for funding since the 1980s.

Watchdog groups also complain that NHTSA, under pressure from the auto industry, has yet to open a separate investigation into the Explorer's design, despite Firestone's claim that the SUV plays a role. NHTSA's own data show Firestone tires fail at a greater rate on the Ford Explorer than on any other SUV. That in itself ought to be reason enough to investigate the Explorer too. "For some reason, a Firestone tire on a Ford Explorer is a deadly combination. There should be two investigations," says Joan Claybrook, a former NHTSA administrator. Now, after an infusion of new funding following the Firestone-Ford fiasco last year, the safety agency is moving ahead with a new test to assess the likelihood of rollovers on all SUVs and to provide real-world rollover ratings. Not a moment too soon. By Joann Muller in Detroit, with Nicole St. Pierre in Washington


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