Firestone and Ford

When an individual looks for a life long partner, he or she looks for someone that is
compatible, trustworthy, and who shares common interests. In business, the process is no
different. Choosing the right business partner, whether it be a supplier, an investor, or a
retailer, is important to the success of the company. Firestone Tire and Rubber Company
partnered with Ford Motor Company in the early 1900’s. The partnership lasted almost a
century, until the two companies went their separate ways. This case study will discuss
the partnership between the two companies, the correlation between this case and
Management 5910, and finally, an analysis of the case.
A. Background of the case study
i. How the relationship started
 Began in 1906 when Henry Ford bought 2000 of tires from Harvey
 Firestone had a some turbulent time, but none more significant than in
1978 when they recalled the largest number of tires ever
 The tire industry history of problems –tire separation, improper inflation
and installation, exposed belt wire, bead flaw, and sidewall cracking
ii. Brief discussion of the laws and rules pertaining to the situation
 Criminally liable for safety issues (damages = settlements)
B. The issue presented (why is this a case for class)
i. Case was selected for class because it is an good example of torts
 The issue represents tort law, which was a topic in class
C. Analysis of the case study
i. Do what extent do companies need to make a proactive effort to evaluate safety
ii. What mistakes did Ford, Firestone, and NHTSA each make early on in the
iii. What possible ethical implications when accepting responsibility versus
blaming others?
iv. Suggest measures that Firestone could take to improve tire quality in the future
Companies have the responsibility and duty to protect the consumers of their product.
Still, some businesses knowingly let the problems to continue because it is cheaper to
settle the problems then to correct them. This case study is a good example where the
company failed to correct a known issue, even tried to hide the data that indicated a fix
was needed.
All companies need to take a proactive stance when it comes to ensuring their products or
services are safe for the public. In the early 1900s, there was little to no safety standards,
it was left to the individual companies. In 1972, the United States enacted the Consumer
Product Safety Act which established the Consumer Product Safety Commission (CPSC).
The CPSC has the power to issue recalls and develop product safety laws that can
became the industry standard. Today, they are consulting companies that specialize in
methodologies and processes that improve the quality of a manufacturer’s product (i.e.
SAP). Most companies understand the importance of having quality and safe products. If
they don’t, a company’s reputation may face negative publicity and costly lawsuits that
can lead to bankruptcy. Not only that, a company’s name can have a negative cogitation
as the case with Firestone. Due to these reasons, a higher emphasis has been put on
consumer safety and quality assurance. As mentioned before, a company owes their
customer a duty and part of that duty is to sell quality products. All companies are
responsible to ensure product safety, not only meeting the standards, but looking for ways
to continuously improve. In doing so, any product that fails will not be a question of
ethics, or whether or not the company performed their duty, but a fluke accident.
Suggest measures that Firestone could take to improve tire quality in the future.
In a competitive environment like the tire industry, competitors need to stand out.
Firestone did just that, but in the wrong way with having the most recalls in an already
plagued industry. In the future, the tire company needs to become innovative with better
technology and capabilities to stay competitive. Firestone should implement a three step
approach to include (1) reinvest in their manufacturing plants; (2) product testing and; (3)
initiate a quality assurance department. The first thing Firestone needs to focus on is to
update their facilities and retrofit the manufacturing plants with the state of the art
equipment. This will ensure the tires are produced at the correct factors (i.e. humidity)
and are quality products. Secondly, a product testing center responsible for performing
extensive testing of their products to ensure the tire can perform in all types of terrain,
weather, and other factors. Finally, the company should stand up a quality assurance
department solely responsible for the quality of the products. This department would
coordinate with the product testing and development section to brainstorm product
improvement projects. Last but not least, there needs to be a culture shift that educates
employees, at all levels, the importance of quality products, following regulations, and
empowers them to point out problems without retribution.