Ford to Share Tire Recall Costs

Sept. 8, 2000 -- Ford Motor Co. will share part of the cost for the massive Firestone tire recall, the automaker said in a government filing.

The company negotiated a deal with Bridgestone/Firestone Inc. to share costs, the Securities and Exchange Commission filing said. But Ford would not give details of how much it would kick in. The recall has so far cost Firestone an estimated $351 million.

“We have preliminarily agreed to bear a portion of the costs of Firestone’s recall,” the filing said.

As the crisis stretches on, at least 88 people have died in the United States and 34 in Venezuela in accidents attributed to faulty Firestone tires, mostly on Ford Explorers. Firestone recalled 6.5 million tires on Aug. 9, and the National Highway Transportation Safety Administration suggested that another 1.4 million be replaced last week. On Thursday, Venezuela began recalling 62,000 Firestone tires sold there.

There are now 63 personal injury lawsuits and 35 class-action suits against Ford, the company said. Nonetheless, sales of Explorers continue unabated. (See related story.)

NHTSA Wants Power

NHTSA officials will go to Congress next week to ask for “additional resources and additional authority” to regulate the transportation industry, agency Administrator Sue Bailey said today.

“The manufacturer’s self-policing did not work in this case, so it is reasonable that the federal regulatory agency needs resources to provide oversight,” she said.

The Clinton administration asked Congress last year to boost the NHTSA’s maximum fine for companies that withhold information from $925,000 to $4 million.

Sen. Patrick Leahy, D-Vt., introduced a bill Thursday that would require U.S. tire and automakers to notify federal regulators within two days of an overseas recall. Sen. Arlen Specter, R-Pa., introduced another bill that would establish criminal penalties for executives who willfully withhold information about dangerous, defective products.

“It’s inexcusable that company executives made a conscious decision not to alert U.S. regulators and the American public to this deadly problem,” said Sen. Frank Lautenberg, D-N.J. “We must give NHTSA the money and the power to better track products with dangerous flaws and harshly punish those who knowingly leave regulators in the dark about defects.”

Agency Under Fire

NHTSA came under fire during Congressional hearings on Wednesday for not acting soon enough in the Firestone case.

“We didn’t know enough. We didn’t know it soon enough,” Bailey said today.

But she defended the agency, saying it moved quickly in May once it realized there was a potential problem.

She says the agency needs to change the way it obtains and processes information, and needs additional claims data, lawsuit information and information on overseas recalls that it currently doesn’t have.

Meanwhile, The New York Times reported today that an analysis of data from the Department of Transportation’s Fatality Analysis Reporting System showed that from 1995 through 1998, the most recent year available, fatal crashes involving Ford Explorers were 2.8 times as likely to list tires as a contributing factor as those involving other sport utility vehicles.

Bridgestone/Firestone recalled 6.5 million ATX, ATX II and Wilderness AT tires last month, many of which were original equipment on light trucks and sport utility vehicles made by Ford. ABCNEWS’ Lisa Stark, The Associated Press and Reuters contributed to this report.