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Alleged tyre defects cost industry dearly

31st August 2000, Page 14
31st August 2000
Page 14
Page 14, 31st August 2000 — Alleged tyre defects cost industry dearly
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Which of the following most accurately describes the problem?

• Bridgestone/Firestone's massive tyre recall problems in North America (CM17-23 August) continue to escalate, as the huge financial costs of the recall and law suits mount.

The US's National Highway Traffic Safety Administration is now investigating more than 750 complaints of alleged Firestone tyre failure, involving at least 62 fatalities. More than 100 lawsuits have so far been filed, a figure expected to increase considerably in the litigation-happy US. Behind the human tragedy of the recall lies commercial chaos on a massive scale.

Far and away the worst commercial victim is Ford, which is having to shut down three of its US light truck assembly plants in order to divert tyres to the recall campaign.

The factories, which make Explorers and USmodel Ranger pickups, will be idle for two weeks. The closure will make an extra 70,000 tyres available to existing customers, but at a cost of 25,003 lost vehicles. The 6,000 workers involved will continue to be paid during the shutdown. The seriousness with which Ford is treating the issue was underlined when as chief executive, Jac Nasser, delivered a personal explanation of the situation to Ford owners on nationwide television during a peak time American football broadcast.

Replacement tyres are being sourced from other makers, including Goodyear and Michelin, which has increased production by 250% to try to meet the demand.

Bridgestone/Firestone has agreed to reimburse up to $100 per tyre to owners who replace the affected tyres with rival products, and has also organised at least 10 aircraft flights with supplies of Japanese-made tyres.

Meanwhile, if the beleaguered tyre maker doesn't have enough problems, the United Steelworkers of America union has issued a strike warning. The union's agreement, which covers more than 8,000 workers at nine locations, expires at the end of August and no new deal on overall terms of employment has yet been reached.


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