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Firestone Facing the Aftermath


The Senate passed a House of Representatives version of the auto safety bill aimed at eliminating a repeat of the Ford/Firestone debacle, and the bill was sent along for President Bill Clinton's signature. Clinton is expected to sign the measure.
Initially, it looked as if the bill would be blocked by two senators, Patrick Leahy (D-Vt.) and Ernest Hollings (D-SC), but the concerns of both were addressed during meetings with Sen. John McCain (R-Ariz.) and the bill was passed.

"Tragically, I fear there will be more deaths and injuries on America's highways before we can finally make those highways safer for Americans, but we have taken a major step forward today," McCain said after the vote.

What does the bill mean?

The bill, which was submitted by Rep. Billy Tauzin (R-La.) and Rep. Fred Upton (R-Mich.) is designed to strengthen the National Highway Traffic Safety Administration's (NHTSA) ability to monitor automakers as well as increase the penalties on automakers that violate portions of the new law.

The bill calls for prison sentences of up to 15 years for executives who knowingly withhold information on products that cause injury or death. Additionally, the bill would raise the maximum penalty from $925,000 to $15 million. McCain decided to submit the House version of the bill to the Senate for a vote after negotiating with Tauzin to change the wording of a portion of the bill that would eliminate the penalties on the company employees. The Senate version initially allowed criminal penalties to be waived if withheld information is reported or corrected in a "reasonable time."

However, the "whistle-blower" provision was reworked so that the person reporting the problem is only exempt from jail time if someone who did not know that failure to report a defect would cause death or serious injury.

The changes were not enough to prevent Leahy from temporarily blocking the bill from reaching the floor of the Senate for a vote. However, McCain huddled with Leahy and convinced him to allow the bill to pass. However, Leahy, who felt the provision didn't provide consumers with enough protection, made it clear changes would need to be made. "Next year, we need to close the loopholes to make this law workable and effective," he said in a released statement.

Hollings threatened to delay passage of the bill because he felt that the information turned over by automakers would not be open to the public, and consequently to lawyers. Hollings believes the only reason the problem with the Firestone tires came to light was lawsuits filed by the plaintiffs' lawyers.

Firestone gets new leadership

John Lampe has been named Bridgestone Firestone’s new CEO.

Former second-in-command John Lampe took the reins of Bridgestone Firestone Inc. last week and immediately began the work of rebuilding the company's public image by saying the company would be more honest and forthright in all aspects of its business.

Lampe moved into the position of chairman, chief executive officer and president of the company Oct. 10 after the former leader, Masatoshi Ono, stepped down from the post. Ono, who led the company for seven years, returned to Japan that same night.

The new CEO cited a three-tiered approach for rebuilding the public's confidence in Firestone products. First, the company must complete the recall of the 6.5 million tires. Then a new management team must be installed. Finally the company must take a "fresh approach" to the way it does business.

The company has already begun portions of each of those tiers. Between Firestone and Ford, 3.7 million of the recalled tires have been replaced. A new member of the management team has been installed: Isao Togashi. He was named president of manufacturing and development and vice president of the company's board of directors.

Togashi is currently touring the company's U.S. facilities as part of a team examining and reassessing manufacturing processes. The fresh approach began with Lampe making himself more accessible to the media. He conducted individual interviews with reporters and appeared on several morning talk shows trying to get the word out about the company's new plans.

The company also released Ono's recent deposition from a tire lawsuit. Lampe said that another executive deposition as well as his own from the same suit will be released after they are given.

Lampe still maintained there is nothing wrong with tires, and that the problem lies with the tire pressure recommended by Ford. However, he said it's time to forget the finger-pointing exercises and resolve the problem and make sure it doesn't happen again.

Ruling delayed

A hearing that would have determined if a federal judge could consolidate more than 200 lawsuits that have been filed against both companies in the wake of the recall, has been delayed temporarily. Ford and Firestone have asked a panel of federal judges to consolidate the 210 lawsuits that have been filed against them. The move is approved often because it reduces the workload on the system and eliminates many conflicting rulings. There have been 60 consumer class-action cases and approximately 150 personal injury cases filed in relation to the tire defects.

 
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