...Case 22 Analysis Firestone and Ford; The Tire Tread Separation Tragedy 1. What are the major and minor ethical issues involved in this case? The major ethical issue is Ford and Firestone’s negligence of the technical problems. They knew that something was wrong yet they did not do anything about it and therefore ignored their consumers’ safety and health. They used a utilitarian decision model where they were looking to accomplish the greatest good for the greatest number. Another major dilemma is that Firestone did not report deaths and injuries to the government and they were very reluctant to recall their defective tires even though it was clear that they were a danger to the consumers. In addition to this, Ford failed to inform that the Ford explorer had been recalled in other countries than the US due to danger. Another key issue is that none of the companies agreed to take responsibility of their products as well as their actions. Minor issues were the fact that the companies tried to cover the news and evidence to reach the public. Firestone had an issue with how they responded and dealt with the crisis. Firestone was also very ignorant with their manufacturing property in Decatur, Illinois. They did not take necessary actions to manage it properly. We can also see a problem in the way they handled the relationship between the two companies. Instead of working it out they had a corporate divorce that resulted in major damages for the both companies as well as...
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...Firestone Case Study Robert Workman Jessica Jurkowski Michael Wilding Webster University Firestone Case Study BACKGROUND In 1900 Harvey S. Firestone established The Firestone Tire and Rubber Company, the company started with 12 employees. They started out by supplying rubber tires for wagons and buggies. In the 1908 Henry Ford and Harvey Firestone formed a partnership with firestone supplying tires for the new model T this was a natural relationship because they had mutual friends. (Noggle and Palmer, 2005) Today Firestone is known as Bridgestone/Firestone after the two companies merged in 1990 for $2.6 billion. Today the company markets 8,000 different types and sizes of tires along with other products. Firestone has had a substantial history of scandals relating to tire safety In 1978 Firestone recalled 14.5 million tires—the largest tire recall at the time—after excess application of the adhesives binding the rubber and steel resulted in 500 tread separations and blowouts. The company was also fined $500,000 for concealing safety problems. ("e-businessethics.com") However in the late 90’s Firestone would be put into serious jeopardy and be threatened with going bankrupt. The Ford Motor Company was started by Henry Ford in 1903 in Dearborn, Michigan producing only a few cars a day. Ford was the first company to use assembly line production and has grown into one of the largest family run organizations in the world In 1999 Ford had a staff of 360,000 employees...
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...On August 9, 2000, Bridgestone/Firestone Inc. announced it would recall more than 6.5 million tires, most of which had been mounted as original equipment on Ford Motor Co. Explorers and other Ford light trucks. Bridgestone/Firestone had become the subject of an intense federal investigation of 46 deaths and more than 300 incidents where Firestone tires allegedly shredded on the highway. The Firestone tires affected were 15-inch Radial ATX and Radial ATX II tires produced in North America and certain Wilderness AT tires manufactured at the firm's Decatur, Illinois, plant. This tire recall was the second biggest in history, behind only Firestone's recall of 14.5 million radial tires in 1978. The 1978 tire recall financially crippled the company for years to come and the August 2000 recall threatened to do the same. Consumers, the federal government, and the press wanted to know: Why didn't Ford and Firestone recognize this problem sooner? Let us look at the series of events surrounding the tire recall and the role of information management. 1988---Financially weakened from its 1978 tire recall, Firestone agreed to be acquired by Bridgestone Tires, a Japanese firm. To increase its sales, Firestone became a supplier of tires for Ford Motors' new sport-utility vehicle (SUV), the Explorer. March 11, 1999---In response to a Ford concern about tire separations on the Explorer, Bridgestone/Firestone (Firestone) sent a confidential memo to Ford claiming that less than 0.1 percent of...
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...I. The Pre-Analysis: A. Perspective: 1. Describe the perspective of the author(s) of the case study and the possible biases that might result from that perspective: The author, Archie B. Carroll is professor at University of Georgia. He may neither work for any company nor be a significant decision-maker in a company. Therefore, he analysis and perspective may different from perspective of important decision-makers. Since he is a professor, he may not know much about car and tire and the difference impact of different tires on different car. He may be a loyal customer of Ford, so he may bias toward Ford and give favorable information and perspective for Ford. 2. My perspective as the analyst: Ford is one of my favorite brands because of its bold image. Therefore, I may be more interested in favorable facts and deny negative numbers of Ford. I don’t know much about automobiles, so I may not understand the consequences of tire tread separation when driving. B. State what you are bracketing: They would do bad things to lower the costs of tire which led to tire tread separation. They would have blamed each other and their customers for their own fault. They would keep all customers’ complaint and lawsuit private from public. They would continue to use low quality tires. II. The Situation : A. List the facts relevant to the issue(s) identified: • The first lawsuit against Firestone was in 1991. • Lori Lazarus was trapped in her car and rescued...
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...* * How and why is it important for businesses to engage with the media during a crisis? What strategies are successful in external communications for business during such times? Compare & contrast two news stories which centre on a crisis for different businesses giving detailed analysis of each communications strategy. This Essay will begin by reviewing crisis definitions and message strategies. Next it will explore translation strategies used by organisations involved in a crisis to communicate with stakeholders. The essay will then consider Ford–Firestone’s tire failure crisis of 2000 as an example of poor crisis management, and contrast toy maker Mattel’s recall crisis of 2007 as an example of successful crisis management. It will first lie out the rhetorical context of each case before embarking on a detailed analysis equating the effectiveness of both firms’ external communications, and in the case of Ford-Firestone, how these might have been alternatively approached in order to avoid detrimental reputational damage. * Fink (1986, from King, 2000) defines an organisational crisis as ‘a situation that can potentially escalate in intensity, fall under close government or media scrutiny, jeopardize the current public image of the organisation or interfere with normal business operations.’ Pearson and Mitroff support this in their ‘five dimensions of a crisis’, explaining that the situation will be ‘highly visible, require immediate attention, have a surprise...
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...manufacturers have had controversies involving the use of their tires. Firestone had their controversy with the Ford Motor Company, while Michelin had their controversy in the racing world. Each manufacturer had legal battles, but only Michelin realized the fault in the company tires and deemed them unsafe for use. Automobiles have long since been a major part of our society and for the vast majority of the world. The automobile might be one of the greatest inventions ever, but what is the most important feature of the automobile that is actually in contact with the ground? The answer is simple, the tires. The tires that we think of today are pneumatic tires, meaning that air is enclosed in the void area between the inside of the tire and the wheel, thus reducing vibration and increasing traction. The first pneumatic tires were used on bicycles, not on cars, but that same technology would come to be a major part of the automotive industry. Since their early uses, there have been safety concerns for tires. This prompted many tests ensure the safety of the product. There are countless numbers of tire manufacturers. For example, alphabetically there is Avon, Bridgestone, Dunlop, Firestone, Goodyear, and Michelin, just to name a few. Two of those manufacturers, Firestone and Michelin, have both had major controversies surrounding the use of their tires. Firestones controversy was with the Ford Motor Company in the everyday world, while Michelins was in the Formula...
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...Running head: Total Recall the firestone company recall of tires Total Recall The Firestone Company’s Recall of Tires Seth Jackson Current Trends in Electronic Management ABSTRACT This paper discusses the recall of Firestone Tires in the United States .and the relative complicity of Firestone, Ford Motor Company and its consumers. Because of Firestone’s knowledge of the tire defects and lack of action, fatal and critical accidents resulted from tires used on the Ford Explorer. Firestone chose, instead, to blame Ford and its consumers for the tires defects. INTRODUCTION In 1906, Henry Ford purchased 8,000 tires from Harvey Firestone, who began producing tires at a small factory in Akron, Ohio in 1900. The sale initiated a long, growing relationship between two eventual leaders in their respective industries. In a matter of just a few short months in 2000, a very robust business-to-business relationship, 100 years in the making, had been destroyed by a lack of communication, poor quality management, and the disregard of consumer concern were the rules surrounding ethics used in the ethical decision made from Ford or Firestone? How did the recall affect how everyone viewed and interpreted the entire tire manufactures? These are just a few of the questions we will discuss throughout this paper. Webster Online defines ethics as the discipline dealing with what is good and bad and with moral duty and what really stands out is the idea how one company...
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...Ford vs Dell Executive Summary FORDs current method of controlling all aspects of the manufacturing is outdated and is limiting the corporation’s annual results. In order to stay competitive and become efficient again, FORD needs to re-evaluate their current supply chain and implement key portions of DELLs vertically integrated supply chain model. A proper implementation will increase information flow between suppliers, departments and dealers resulting in a reduction of redundant inventory and focus towards just in time inventory. All of these factors will further drive up the already US industry leading profit margin per vehicle. In order to accomplish these goals FORD needs to refocus the Purchasing department’s responsibilities, consolidate and develop suppliers that deliver finished high level components and increase the information flow across all points of the supply chain. These steps will help to introduce a more pull-based system. Contents Issue identification 1 Environmental and root cause analysis 2 Alternatives/Options 3 Recommendations 4 Implementation 5 Monitor & Control 6 Issue identification • Current order to delivery (OTD) is more than 60 days. • Management of large supplier network. • Utilization of IT is lacking. • Purchasing isn’t integrated into Product development. • Independent dealership network has resulted in FORDs loss of control over customer service experiences. This network also...
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...IMAGE CHANGE ANALYSIS INTRODUCTION: In many organizations today, change is becoming more common every day. Change is vital for the “survival” of many companies. In many situations change was not even talked about and those companies are no longer in business. Many companies are under severe economic pressure and change is inevitable. Change is the only way for some. In today’s society we have take-over’s, down-sizing, mergers, joint ventures etc. as companies try to grow. Some companies focus on the question “what do we do to make our company grow”. “How many employees are we going to affect?” Let’s focus on my former employer Ford Motor Credit. Their thoughts back in 2003 was total quality is a way of life. This was the main strategy in order to bounce back financially, and to gain their credibility back. A. The strategic change initiative allows us to focus on four areas. a. Initiate Effort or gathering support b. Launching or agreeing on an approach c. Executing or doing what it takes d. Gaining Momentum or communicating results APPLICATION ANALYSIS: The Company of Focus in this analysis is Ford Motor Credit. There was a point and time when Ford had lost its credibility with the many Americans. There were many lawsuits against the company. There was an ongoing issue with the firestone tires that were put on each Ford SUV. The claims were that the tires blew out and caused many deadly accidents. Ford had to adhere to the...
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...2012 International Conference on Industrial Engineering and Operations Management Istanbul, Turkey, July 3 – 6, 2012 Car Recalls: A Problem Unique to Toyota or For All Car Makers? Kamrul Ahsan School of Management and Information Systems, Faculty of Business and Law Victoria University Australia Abstract Often automobile recalls are drawing media and public attention. Influenced by Toyota’s recent automobile recalls 2009-2010 this research conducts an empirical study on historical car recalls. The research uses secondary data from recall websites maintained by public and private organizations. For different car model year and manufacturer the study looks at frequency of recalls, recorded customer complaints, and yearly sales data. Analysis shows recalls are a common event with the majority of recalls initiated by only a few car makers. Though car makers use many eye catching and popular quality and customer care slogans and programs, many popular car makers still face valid customer complaints and consequently face many unwanted recalls. This study identifies that most recalls occur during the first five years of the car model year. This preliminary study of automobile recalls can be further extended at a later stage to identify key causes of recall. Keywords Product recalls, Reverse logistics, car recalls, product returns, closed loop supply chain 1. Introduction Though manufacturers use state-of-the-art operations philosophies, tools and techniques, it is difficult...
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...Ford Motor Company- Pleasing or Unattractive One of the largest American global automakers, Ford Motor Company recently changed its slogan from “Drive One” to now “Go Further”. This new global slogan is replacing its old slogan because the company feels that this innovative slogan captures what the company’s culture always has been doing since it infancy with its founder Henry Ford. The new slogan “Go Further”, resonates how Ford Motor Company as individuals, as a team, and as a company has always gone further for its customers, it dealers, and its communities. But is Ford Motor Company echoing what its slogan is believed to exemplify? Ford Motor Company started in 1903 by Henry Ford, a young man with a passion for and commitment to machinery and engineering at a very young age. Henry Ford’s passion to create a vehicle that was affordable to the common man, started with his first vehicle the Quadricycle, a horseless carriage with a gas-powered engine and then came the first Ford Model A which was massed produced to be affordable to middle-class America. This company grew from its first automotive plant in Detroit, Michigan to plants all over the world. Being a global automaker in today’s modern world, it appears Ford has had its share ups and downs as a global corporate citizen just like its global market competitors. In the next few sections, an analysis of a few facets that aren’t observed quite enough of Ford Motor Company will be observed and perhaps should have some...
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...CASE ANALYSIS ON FORD MOTOR COMPANY Name: sunil sharma Madonna ID: Subject: Business Policy Subject Code: MGT_4950_WB_58_01_2014_10 Date of Submission: The Ford Motor Company Brief Profile The Ford Motor Companyis an American multinational automaker headquartered in Dearborn, Michigan, a suburb of Detroit. It was founded by Henry Ford and incorporated on June 16, 1903. The company sells automobiles and commercial vehicles under the Ford brand and luxury cars under the Lincoln brand. In the past it has also produced heavy trucks, tractors and automotive components. Ford owns small stakes in Mazda of Japan and Aston Martin of the United Kingdom. It is listed on the New York Stock Exchange and is controlled by the Ford family, although they have minority ownership. Ford Motor Company was founded in 1903 by Henry Ford in Detroit, MI. Not only did Ford revolutionize the development of the automobile as a product, he is also the visionary behind the idea of mass production. Ford's ability to make automobiles affordable for the masses is cited as a driving force behind both the automobile industry and the creation of a middle class in America. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines; by 1914 these methods were known around the world as Fordism. Ford's former UK subsidiaries Jaguar and Land Rover, acquired in 1989...
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...Remember the Ford Pinto‚ the egg-shaped economy ride that sometimes exploded when struck from behind? Mark Robinson Does. He also remembers the look on the faces of the jurors who awarded $127 million to his client 13-year-old burn victim Richard Grimshaw‚ in 1978‚ based on a design flaw that led to the deaths of 27 people from fuel-tank fires in Pintos. The jurors were outraged to learn that the Ford Motor Co. became aware of the risks of passenger deaths in 1971 yet waited until 1976 to move the Pinto’s gas tank from behind the rear axle to a safer spot above the center of the axle. "Ford made a decision to place-money ahead of human lives‚" Robinson says‚ waving an Aug. 26‚ 1971‚ fuel system integrity memorandum. That damning piece of evidence advised Ford executives not to recall or re-design the Pinto "until required by law." Thirty years later‚ Robinson charges‚ little has changed. The automobile industry continues to place profits ahead of people‚ he says. In recent years‚ they’ve added a new weapon to their arsenal‚ according to the plaintiffs’ bar: protective orders granted by courts and genuflecting judges that keep corporate transgressions out of the public eye. Recently‚ aided by lawmakers‚ consumer groups and the media‚ plaintiffs’ lawyers have begun firing back‚ asking courts to let the sunshine in to cleanse dirty little secrets like those behind the Ford Pinto. The Colonel’s Secret Recipe and the formula for Coca Cola—the trade secrets on which corporate...
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...truck market consisted of approximately 4 million units sold out of 14 million total vehicle sales in the United States. By 1999, the percentage of the total market had increased and total sales were higher. SUVs/light truck sales were 8.2 million of 16.4 million units sold.21 47.6 percent of Ford Motor Company's sales are of SUVs, primarily its Ford Explorer and larger Expedition, but also of its even larger Excursion. These vehicles took the place of the truck-like Bronco and smaller Bronco II. The largest players in the SUV market (with the number of units sold in 2000) are as follows: 22 [pic] In 1997, most auto manufacturers expanded their SUV offerings and entered the luxury SUV market. These SUVs, with prices around $50,000, featured in-vehicle televisions and VCRs, leather interiors, and all the amenities of luxury cars. The new market entrants are listed below: [pic] By 2000, the U.S. segment of the luxury SUV market was 80.5 percent.23 At that time, SUV purchases constituted one of every five auto sales in the United States and were the highest-margin products in all the automakers' lineups .24 Profits per SUV averaged $ 10,000 per unit. Profits on the Ford Excursion were at the top of the field at $18,000 per unit. At that time, SUVs comprised 20 percent of all of Ford's vehicle sales and accounted for the majority of Ford's profits.25 By the summer of 2001, there were some indications of a slowdown in the SUV market. Many attributed the decrease...
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...Introduction Ford Motor Company is an American multinational automaker, founded by Henry Ford and incorporated on June 16, 1903. The company sells automobiles and commercial vehicles under the Ford brand and luxury cars under the Lincoln brand. In the past it has also produced heavy trucks, tractors and automotive components. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines. Henry Ford's methods came to be known around the world as Fordism by 1914. Ford is the second-largest U.S.-based automaker and the fifth largest in the world based on 2010 vehicle sales. At the end of 2010, Ford was the fifth largest automaker in Europe. Ford is the eighth-ranked overall American-based company in the 2010 Fortune 500 list, based on global revenues in 2009 of $118.3 billion. In 2008, Ford produced 5.532 million automobiles. And employed about 213,000 employees at around 90 plants and facilities worldwide. Competition Factor Between the 20th century 80s to 90s, the growth of automobile industry is very slow, and many American companies try to use discount and some preferential policy to attract customers. At the same time, more and more Japanese cars were preferred by customer cause of their high quality and attractive price, like Honda, Toyota and Nissan. Compared with Ford, Japanese cars used higher technology...
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