The heat from the spotlight is about to get hotter as Ford Motor Co. and Bridgestone/Firestone move to center stage Wednesday on Capitol Hill, defending their actions to a pair of House subcommittees regarding their involvement in the recall of 6.5 million Firestone tires.
The hearings come at a flashpoint in the recall, where public opinion of Firestone and Ford’s handling of it is at a low. And they come on the heels of a Labor Day weekend where at least one fatal accident — one in which a 10-year-old Texas boy was killed — is being blamed on the tires in question.
The weekend accident claimed the life of Mark Rodriguez, 10, of San Antonio, and injured several other members of the family including father Victor Rodriguez, who was driving the 1996 Ford Explorer at the time. While driving north of Laredo, Texas, the vehicle went out of control and flipped off Interstate 35 onto an access road. The vehicle was equipped with Wilderness AT tires, which one investigating officer blamed for the accident: "It definitely was a blowout. The vehicle did not skid. The tread separated from the tire," Jose Martinez, deputy chief of the Webb County Sheriff's Department, told CNN.
Wednesday’s hearings will include Ford CEO Jac Nasser after all. After initially saying he would not attend the hearings, Ford president and CEO Jacques Nasser now says he will testify before the committee.
Nasser says he changed his mind after the line of questioning changed from a technical orientation to one about the company's reputation. "Now that there are allegations about whether we were open enough or acted quickly enough, I feel I need to go," Nasser said at a recent press conference. "The questioning has changed being more technical in nature."
In addition to Nasser's testimony, Bridgestone/Firestone's chief executive Masatoshi Ono will participate in the hearings. Additionally, three accident victims as well as Sue Bailey, the new head of the National Highway Traffic Safety Administration (NHTSA), will provide testimony for the subcommittee. A hearing for the Senate Commerce Committee headed by Sen. John McCain (R-Ariz.) has been postponed until Sept. 12.
The Senate Appropriations transportation subcommittee, headed by Sen. Richard Shelby (R-Ala.) will hold a meeting on Sept. 6 to see if NHTSA needs a larger budget to look into defect cases as well as granting the agency more authority to levy larger fines on company's that withhold information regarding defects. Currently, the agency can impose a fine of $1100 per violation. The figure cannot exceed $925,000.
Consumer advocates scoff at the maximum figure, implying that the amount is not a deterrent. Joan Claybrook, president of Public Citizen, suggested that two companies conspired to hide the defect and the fine is merely a drop in the bucket. "It’s been a cover-up," she said. "The amount is irrelevant to a large corporation.
More safety issues
NHTSA said Aug. 30 that the number of deaths attributed to problems with the tires has risen from 62 to 88 as well as more than 250 injuries. Additionally, the agency indicated that this may change the nature of the investigation, changing it from a probe to an engineering analysis.
This means that the agency will move from reviewing documents provided by the companies to actually testing the tires in question to determine if the tires are defective. The agency claims to have received more than 1400 complaints regarding Firestone tires, ranging from blowouts, tread loss and other defects.
Bridgestone/Firestone has issued a recall for the 6.5 million ATX, ATX II and Wilderness AT 15-inch tires used on the Ford Explorer, Mercury Mountaineer and some Ford Ranger models. However, NHTSA is looking into expanding the investigation into other size tires. Some 16-inch versions of the tires are showing similar problems.
And in Venezuela, one of the first countries to pursue consumer complaints regarding the Firestone tires, the company and the government have agreed on a 62,000-tire recall for the suspect Wilderness AT and ATX tires. In addition, Venezuela is expected to file criminal charges against Ford and Firestone regarding deaths and injuries in accidents involving both the 15-inch and 16-inch versions of the tires.
Venezula's safety agency, Indecu, alleges that the two companies held a secret meeting last year regarding the tires, but agreed only to change the design of the tires, not to recall the tires already in use. Ford did issue a recall in Venezula last May. Nasser said in the press conference that Ford issued a recall of the tires, in spite of disagreement by Bridgestone/Firestone. He added that Ford will need to meet with the government to clear the air.
"Is there any confusion down there?" he said. "I'd have to say there is. And will we continue to meet with the government to try and clear up the matter? We'll continue to try to do that."
Consumers on edge?
A recent survey shows that consumer confidence in the automaker's handling of the situation is dwindling quickly. CNW Marketing Research of Bandon, Ore., surveyed more than 2000 people who intend to purchase sport-utility vehicles. Just 19 percent of those involved felt the company handled the situation properly. Those figures are down significantly from previous surveys, which showed Ford's approval rating at 70 percent on Aug. 20 and 42 percent on Aug. 25.
However, all of the negative feelings haven't hit Ford's sales results yet. The company's August sales were up over the previous year's totals overall, and sales of the Explorer were down just 0.3 percent from 1999 figures.