Firestone Recalls Millions of Defective Car Tires

Consumer groups and the federal government received hundreds of complaints about Firestone 500 radial tires being defective. The tires also were directly linked to more than forty deaths and countless vehicle accidents. In the fall of 1978, under pressure from the National Highway Traffic Safety Administration and companies that bought the tire for resale, Firestone recalled the line, leading to one of the largest and most expensive consumer product recalls in American business history.


Summary of Event

The 500 line of radial tires manufactured by Firestone had an increased probability of tread separation from a wheel’s steel frame. Documents indicate that Firestone management, including the president of Firestone, Mario A. DiFederico, was aware of the tire’s defect. Apparently, Firestone could not adequately test the problem in its manufacturing plants because the tread separation occurred as the tires aged. [kw]Firestone Recalls Millions of Defective Car Tires (Oct. 20, 1978)
[kw]Tires, Firestone Recalls Millions of Defective Car (Oct. 20, 1978)
Firestone
Operation White Snow
Automobile safety;tires
Rubber;automobile tires
Firestone
Operation White Snow
Automobile safety;tires
Rubber;automobile tires
[g]United States;Oct. 20, 1978: Firestone Recalls Millions of Defective Car Tires[01760]
[c]Business;Oct. 20, 1978: Firestone Recalls Millions of Defective Car Tires[01760]
[c]Ethics;Oct. 20, 1978: Firestone Recalls Millions of Defective Car Tires[01760]
[c]Government;Oct. 20, 1978: Firestone Recalls Millions of Defective Car Tires[01760]
Robertson, Thomas A.
DiFederico, Mario A.

U.S. transportation secretary Brock Adams, left, and National Highway Traffic Safety Administration head Joan Claybrook announce the Firestone tire recall.

(AP/Wide World Photos)

Firestone opted to not disclose the defect to consumers, an estimated forty-one of whom died and hundreds of whom were in traffic accidents caused by blowouts. After being less than cooperative with the U.S. National Highway Traffic Safety Administration (NHTSA), Firestone nevertheless decided to recall the tires in 1978, marking one of the largest and most expensive product recalls in the history of American business.

To compete with the radial tire that had been manufactured in Europe for several decades, the tire companies Goodrich and Michelin introduced radial tires to the United States during the late 1960’s. Although more expensive and requiring greater technical skill to produce, radial tires were widely regarded to be superior to previous types of tires in the areas of fuel efficiency and longevity.

The Firestone Tire and Rubber Company, founded in 1900, trailed only Goodyear in its control of the domestic tire market at the beginning of the 1970’s. Firestone began manufacturing its first radial tires, the 500 steel-belt line, in January, 1972. To deliver the product to the market as quickly as possible so that it could capitalize on the high demand for radial tires, Firestone converted machinery that was originally used to produce other types of tires, such as the biased-ply model. The biased-ply model was the most widely used tire in the United States prior to the introduction of the radial tire.

Firestone’s radial tires initially received positive reviews by consumer magazines. The 500 steel belt became one of the most popular tires on the market. Over the course of the 500 line, Firestone produced and sold approximately twenty-four million tires at an estimated cost of about fifty dollars per tire. However, as Firestone soon realized, the tire had a defect. Firestone employees alerted upper management that the tire had a problem involving tread separation. The 500 radial tire was prone to tread separation because moisture seeped into the tire and caused corrosion of the steel frame of the tire. Consequently, the tire was susceptible to blowouts, particularly at high speeds.

As early as 1973, just months after Firestone began selling the tires, dissatisfied customers were returning the product to dealers. Firestone’s own director of development, Thomas A. Robertson, wrote in a September, 1973, internal company memorandum to top management expressing concern about the 500 radial. In the memo he wrote, “We are making an inferior quality radial tire which will subject us to belt-edge separation at high mileage.” Firestone received negative feedback from other sources. Major tire buyers, such as General Motors General Motors, Ford Motor Company Ford, Atlas Tire, Montgomery Ward, and Shell, threatened to terminate their contracts with Firestone. In 1973, Atlas wrote to Firestone: “In the eyes of Atlas, it appears Firestone is coming apart at the seams and drastic action is required.” The safety issue was not disclosed to company stockholders or the public; instead, Firestone tried to correct the problem while still manufacturing the tire with its known defect.

In 1976, the Center for Auto Safety, a lobbying group for consumers founded in 1970, informed the NHTSA of the disproportionate amount of complaints filed about the Firestone 500 radial tire: more than fourteen thousand. The following year, the NHTSA surveyed about ninety thousand tire owners regarding their satisfaction with different types and brands of tires, including the Firestone 500. Survey results revealed consistent dissatisfaction with the Firestone 500, more so than any other tire. Furthermore, the NHTSA presented data that indicated that the 500 radial tire was more than twice as likely to be returned to dealers than other tires.

In May, 1978, bolstered by the research findings, the NHTSA issued a recommendation to Firestone that the company recall all steel-belted radial tire models in the line. Millions of tires would be subject to recall, at an estimated cost of $275 million. The annual net income of the company in 1977 was $110 million; clearly, the recall would be a serious financial burden to Firestone.

Firestone opted to not abide by the recommendations made by the NHTSA. Instead, the company asserted that it had conducted its own testing and then denied any problem with the 500 radial tire. Firestone blamed problems with the tires on consumer misuse, such as speeding, overinflation or underinflation of tires, improper maintenance, and rough use.

Firestone management also appeared before a U.S. House of Representatives subcommittee and initiated a lawsuit against the NHTSA. At the same time, Firestone was listed as the defendant in a substantial number of civil lawsuits stemming from the injuries, fatalities, and damages caused by the faulty performance of the tire. In one case, the company settled for $1.4 million.

On October 20, 1978, after Firestone was left with no other options, it voluntarily recalled 500-model tires produced in 1975 and 1976. The recalled tires were replaced with a newer model, the 721 line of radials, which received favorable safety reviews. Firestone also offered a discount to customers who were trading in tires that had been manufactured prior to 1975. The recall led to the replacement of an estimated ten million tires. The cost to Firestone, estimated at $150 million, nearly bankrupted the company.



Impact

Firestone was fined $500,000, one of the biggest fines levied against an American company up to that time, for its failure to disclose the safety issue to the public. While other tire makers experienced problems with the manufacturing of radial tires, these problems were not as large or as costly as those of Firestone.

Also in 1978, Firestone ceased production of the 500 steel-belt line; however, this was not the end of radial tires. Instead, radial tires are now the most commonly used tires in the industry. In 1979, Firestone president DiFederico resigned and was replaced by John Nevin, former chief executive officer of Zenith. Forced to make difficult decisions to save the floundering company, Nevin closed plants and laid off workers, eventually cutting the number of Firestone employees to half its total workforce. Firestone headquarters were relocated from Akron, Ohio, to Chicago, Illinois. In 1988, Nevin negotiated a buyout of Firestone by Bridgestone, a Japanese-owned company.

In 2000, after another NHTSA investigation and testimony before the U.S. Congress, a voluntary recall of approximately six million Firestone/Bridgestone tires was implemented. Several similarities exist between the 1978 and 2000 recalls. Tread separation was the defect and impetus behind both. As during the 1970’s, Firestone/Bridgestone reportedly had been aware of the defect in 2000 as well. As was the case during the 1970’s, Firestone initially denied any tire defect and reiterated that tire failure was caused by consumer misuse. However, whereas the 1978 recall largely centered on passenger vehicles, the foci of the 2000 recall were the sport utility vehicle, especially the Ford Explorer, and lightweight trucks. Defective tires led to rollovers, especially, and caused between sixty-two and two hundred or more deaths. The cost of the 2000 recall was estimated to be $350 million. Firestone
Operation White Snow
Automobile safety;tires
Rubber;automobile tires



Further Reading

  • Healey, James R., and Chris Wayward. “Tire Concerns Go Back 1 1/2 Years Before Recall: Ford Documents from January ’99 Refer to Problems.” USA Today, September 11, 2000. Provides a summary of events that led to the 2000 tire recall by Firestone/Bridgestone.
  • Love, Steve, and David Giffels. Wheels of Fortune: The Story of Rubber in Akron. Akron, Ohio: University of Akron Press, 1999. This book provides a comprehensive history of the tire industry and includes discussion of Firestone.
  • McDonald, Kevin M. Shifting Out of Park: Moving Auto Safety from Recalls to Reason. Tucson, Ariz.: Lawyers & Judges Publishing, 2004. A comparative study of the auto recall process that includes discussion of regulations, the courts and litigation, federal investigations, and consumer awareness.
  • Stanley, Guy D. D. Managing External Issues: Theory and Practice. Greenwich, Conn.: JAI Press, 1985. One case study in management this text examines the Firestone 500 tire scandal from the perspectives of Firestone and government safety experts.


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