By ROBERT L. SIMISON
Staff Reporter of THE WALL STREET JOURNAL
DEARBORN, Mich. -- Late every afternoon, Ford Motor Co. executives
gather to review the efforts of a 500-person team they have marshaled
to cope with the Firestone tire crisis. The team now occupies eight
conference rooms spread across the 11th and 12th floors of Ford
"We're like an amoeba," says one team member.
In addition to the 500 people directly assigned
to the crisis, 4,000 to 5,000 employees
elsewhere are involved, including those at a
hastily expanded 24-hour customer hotline.
Individual groups are working on logistics, data
analysis, technical issues, tire procurement, communications, legal and
government affairs, and customer and dealer issues.
For Ford President and Chief Executive Jacques Nasser, the
damage-control effort has become nearly a full-time job that promises
to make or break his career. He participates in each daily crisis meeting,
even when he's out of town. He arrives armed with information gleaned
from outside his usual reporting channels. He has taken to calling
dealers, suppliers and even owners of Ford vehicles who have written or
e-mailed him. He has called Ford's own customer hotlines and those of
Bridgestone/Firestone, posing as a consumer. He goes online to see
what people are saying about Ford in Internet chat rooms.
Already Mr. Nasser has taken some big steps to hasten the replacement
of the 6.5 million recalled Firestone tires, now linked to reports of 88
deaths and more than 250 injuries when their treads peeled off on Ford
Explorer sport-utility vehicles and other Ford light trucks. He has
brought in competitors of Bridgestone/Firestone Inc. to sell replacement
tires, bought tire molds for some of them to work with and shut down
three Ford plants that make new Explorers and other light trucks, in
order to free up more tires for use in the replacement campaign.
The measures are putting Ford's recent string of
quarterly earnings records in jeopardy. In a
quarterly filing with the Securities and Exchange
Commission Friday, Ford officially disclosed it has
agreed to pay an undetermined portion of the costs
of the Bridgestone/Firestone recall. And officials
acknowledge that third-quarter earnings will take a
hit. Contributing to that will be the decision,
announced Friday, to keep three light-truck plants
closed for a third week this week to make more
15-inch tires available to replace those being
Mr. Nasser's aggressive personal role offers a sharp
contrast with the more diffident behavior of other CEOs in the midst of
corporate crises. For instance, his counterparts at
Bridgestone/Firestone and its parent, Japan's Bridgestone Corp., have
stayed largely in the background, raising questions in some critics'
minds as to whom is in charge. Meanwhile, the company balked at
sharing with Ford the data that led to the recall, resisted replacing tires
not only in the U.S., but also overseas, and has implied that if only
consumers took better care of their tires there wouldn't be a problem.
But the 52-year-old Mr. Nasser isn't out of the woods yet. Ford's
credibility has been badly hurt by disclosures that the company knew
about problems with the Firestone tires on its Explorers before it told
U.S. regulators and consumers. Ford officials didn't tell the National
Highway Traffic Safety Administration until May about a tire-replacement
program last year in the Mideast, where treads were peeling off
Firestone tire models that aren't involved in the U.S. recall and causing
accidents and deaths. Ford says Bridgestone/Firestone repeatedly failed
to find a problem with the tires, so the auto maker replaced them as a
customer-satisfaction move. Ford officials say they didn't feel obligated
to report the matter to NHTSA because they hadn't found a safety
Ford also appeared slow to act and slow to tell
U.S. authorities about a rash of accidents and
fatalities related to tread-separation incidents in
Venezuela and other Latin American countries.
Last week, congressional investigators released
an internal Ford memo describing how Bridgestone/Firestone didn't
want to cooperate in replacing the tires overseas because it felt that
doing so would obligate it to report the matter to NHTSA. Ford
maintains it acted expeditiously and appropriately in each case, including
the U.S. recall.
At congressional hearings featuring testimony from Mr. Nasser last
week, one lawmaker after another accused Ford and
Bridgestone/Firestone in front of TV cameras of ignoring signs of a
serious safety defect while people were being killed, or of trying to cover
up a problem. Rep. Bart Stupak (D., Mich.) blasted both companies for
being unaware of the problem and for not taking action sooner after
State Farm Insurance Co., plaintiffs' attorneys and even a Houston TV
station had noticed a deadly pattern. Declared Rep. Tom Bliley (R., Va.):
"Ford ... is not blameless in this matter. ... When faced with hundreds
of complaints of major tire defects on the Explorer, [Ford] failed to
respond with the sense of urgency that one would expect when the
safety of so many people rested on its shoulders."
Adding to the uncertainty engulfing Mr. Nasser is that the root cause of
the tire separation remains a mystery. It isn't clear whether the fault lies
with Firestone's tires, Ford's vehicles, or the two in combination. An
analysis of complaints filed with NHTSA indicates a disproportionate
number of tread separations and accidents involving Explorers equipped
with the recalled tires. Ford officials argue that this doesn't necessarily
prove a problem with the Explorer because the problem was with tires
Bridgestone/Firestone built specifically for that model. They point to the
spotless record compiled by Goodyear Tire & Rubber Co., which built
Explorer tires to the same specifications from 1995 through 1997.
It all adds up to a Herculean challenge for a man who became Ford's
CEO in January 1999, on the strength of his track record as a cost
cutter. The son of Lebanese immigrants to Australia, Mr. Nasser as a
young man was involved in bicycle and coffee shops. His Australian
accent is evident in two TV commercials he taped for Ford recently to
reassure the company's vehicle customers.
Mr. Nasser joined Ford after taking a business degree from the Royal
Melbourne Institute of Technology, and he held several positions in
Ford's far-flung Asian operations. Subordinates describe him as
fascinated with technical detail and able to ask insightful questions that
often push them in new directions. A compact, fit and energetic man
who sleeps little more than four hours a night, Mr. Nasser collects
expensive watches, fancies well-tailored clothes and drives himself to
work in a town where other CEOs typically have a chauffeur.
The trouble with Firestone tires first appeared on Mr. Nasser's radar
screen early this year when aides showed him tape of a February report
by Houston TV station KHOU. It linked tread-separation incidents
involving Firestone tires on Explorers with several fatal accidents. Then,
in early May, NHTSA opened an inquiry into the matter.
Ford built much of its success in the 1990s on a massive expansion of
its profitable light-truck operations, which build SUVs, such as the wildly
popular Explorer, and pickups such as the ubiquitous F-series. Trucks
now account for more than half of Ford's auto production.
With one of Ford's crown jewels threatened, Mr. Nasser got personally
involved. "I started to feel we needed to accelerate our knowledge of
what was going on. We were going to get the best minds on this
quickly. This was a full-time job. I wanted a full-time team," Mr. Nasser
He commandeered a conference room on the 11th floor of Ford
headquarters, ordering "the best communications, best computer
systems and ready access to all the top management," he says. A
recently completed renovation had equipped the building to handle such
Andy Vandecaveye, the 41-year-old chief program engineer for the
current Explorer, was one of the first 15 assigned to the project. "I was
told my job would be to come over here for 15 hours a day," he recalls.
He soon learned that was no exaggeration. As of this morning, he will
have worked 40 such days in a row. He laments not being able to keep
up with mowing his lawn, and says his wife told him last week that his
hair was suddenly starting to show gray at the roots.
Mr. Vandecaveye is in charge of a team of 15 Ford tire, rubber and
other experts who are supervising the search for the root cause of the
tire failures. Mr. Nasser argues that "this is a tire problem," and Ford
officials are hoping for a conclusion that proves him right. Mr. Nasser
pushed Mr. Vandecaveye to hire outside tire experts to help with the
search, and he has given the crisis team carte blanche. "Anybody we call
in the company, we say we're on the tire team, and they say, 'What
resources can we provide?' " Mr. Vandecaveye says.
The root-causes team has gotten used to seeing Mr. Nasser breeze in
once or twice a day to "ask how the engineering analysis is going," Mr.
Vandecaveye says. "He'll grab a tire and ask a question. He likes details.
He wants to know what processes we are using." Mr. Nasser pushed the
team to adopt a rigorous, scientific approach to the inquiry and made
experts in such methodology available to it.
The leaders of the 500-person crisis team gather at a daily meeting with
a standing agenda and a structured discussion of each topic. There are
usually 20 managers seated around a conference table, with 15 or 20
more hovering around the edges and more joining in via conference call.
On weekdays, the meeting is held in the late afternoon; on weekends
it's around midday. John Rintamaki, a Ford group vice president and the
company's chief of staff, acts as chairman.
Mr. Nasser has been pushing the team to press harder to help Ford's
customers, echoing a broader theme of his tenure as CEO. In January,
Mr. Nasser pointedly replaced Ford's old motto -- "Quality is Job One" --
with a new one: "Customer Is Job One." Ford managers carry wallet
cards that show the new line as the foundation of the company's
pyramid of corporate values (with "Superior Shareholder Returns" at the
top). And it isn't just a motto: Starting this year, half of executive
bonuses are based on gauges of customer satisfaction.
Mr. Nasser's calls to the customer hotlines "caught me by surprise,"
says Martin Inglis, head of Ford's North American operations. "He
pushed us to make all the call centers 24-hour operations," Mr. Inglis
says. Ford boosted to 800 the number of employees at its call centers
from the normal 300, and opened a new center in Denver "in record
time," Mr. Inglis says.
Mr. Nasser's personal contacts with customers also had an impact on
Bridgestone/Firestone and other tire makers.
"Originally," Mr. Nasser says, "Firestone wanted to prioritize shipments
of tires to certain states. During this meeting, we said, 'That isn't
customer-friendly. That just isn't right.' We decided not to do that.
Firestone had limited replacements to one Firestone for another
Firestone. And in one of these meetings, we said, 'Look, if we talk to
these other [tire] competitors, maybe we can get some added capacity.'
" Firestone's initial plan would have left some Explorer owners waiting as
long as a year for new tires.
Mr. Nasser's talks directly with customers convinced him there was too
much fear and frustration for that plan to work. "Many customers would
say, 'Look, we've gone to the Firestone tire store and they've told us
we have to wait for two months or three months,' " Mr. Nasser says. "
'Yet, I can go down to Costco, or Belle Tire, and they've got tires. Why
can't we do that?' "
Mr. Nasser leaned on Bridgestone/Firestone to reimburse customers or
dealers for non-Firestone replacements. Ford dealers joined Firestone
stores in installing replacement tires. Ford engineers began testing
alternative tires around the clock. So far, they have declared 34 tire
models made by Bridgestone/Firestone and other tire makers suitable
as replacements. Parent-company Bridgestone agreed to tool up several
plants in Japan to make replacement tires and to ship them by air
Mr. Nasser also approached the CEOs of Continental AG, Goodyear and
Groupe Michelin. "Help our customers by increasing the production of
your tires so we can replace the bad tires with good tires," Mr. Nasser
says he urged them. In response, Firestone rivals cranked up
production of replacement tires. One idea from the daily brainstorming
meeting, says Mr. Rintamaki, the chief of staff, was for Ford to buy tire
molds for some of the rival manufacturers to use. He says Ford is doing
so, but he won't say for which manufacturers.
In one of the daily discussions of tire availability, when Mr. Nasser
offered his usual prod to do more for customers, Mr. Inglis recalls
saying, "I guess we could take them off new vehicles." Mr. Nasser told
the team to look into it. "That was a Friday evening," Mr. Inglis says.
"Our people looked at it over the weekend, and worked out the logistics,
and by the end of the weekend we were ready to go. Then we told Jac."
That led to the three-plant shutdown that was extended into a third
week this week. Ford said the initial two-week closing freed up 70,000
tires for the recall.
Taken all together, Ford officials say, these efforts are expected to
enable the company to complete the recall earlier, by the end of next
year's first quarter. The tire team is still puzzling out how it might be
able to line up enough tires to complete the program even sooner,
perhaps by year end.
Last Thursday, Mr. Nasser got an unusual, semipublic performance
review from his boss, Ford Chairman William Clay Ford Jr. "Nobody," Mr.
Ford declared in a "town meeting" broadcast live to employees
world-wide over Ford's internal TV network, "could have done a better
job than Jac Nasser." Mr. Ford then led the more than 400 on hand at a
world headquarters auditorium in a standing ovation.
Mr. Ford, a great-grandson of company founder Henry Ford, took the
occasion to explain his own reticence throughout the crisis. "Some of
you have said in recent weeks to me, 'Bill, where have you been? You've
been uncharacteristically quiet and behind the scenes.' And, in fact, I
have," Mr. Ford said. His explanation: "I think it would have been very
confusing for the company to have two spokesmen out at this very
Mr. Nasser's senior management team, meanwhile is said to be keeping
Ford's factories running, the product designers on course and the bills
paid. Group Vice President Robert Rewey has drawn special praise from
Ford insiders for producing a U.S. vehicle-sales record for the company
last month in the face of the negative publicity generated by the tire
crisis. This week, Ford is understood to be entering the final phase of
negotiating the purchase of South Korea's Daewoo Motor Co., largely
under the supervision of Vice Chairman Wayne Booker.
At the same time, Mr. Nasser faces a big challenge calming the concerns
of Ford employees. During an internally broadcast "town meeting" on
Sept. 1, Mr. Nasser told employees: "I've received a lot of e-mail from a
lot of employees asking questions about how it will affect compensation,
how it will affect this and that. They're good questions, but not right
now, not right now. I mean, we've got so many things to do that we
really should be focusing all of our energy on making sure that we can
get as many tires out there as possible."