CASE STUDY FIRESTONE*S TIRE RECALL
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Transcript CASE STUDY FIRESTONE*S TIRE RECALL
CASE STUDY
FIRESTONE’S TIRE RECALL
MNGT 5910
7 MAY 2012
PRESENTED BY
Cody Lewis
Josh Palmer
Brian Riley
OVERVIEW
Case Study Background
Regulations and Laws Involved
Issue at Hand
Case 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
Did the violation cause harm
Failed to verify their suppliers products (i.e. Firestone) are safe
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
Companies should not only meet the standards
Power to issue recalls and develop safety laws
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