Traffic Accident in Saudi Arabia Helped Ignite Ford-Firestone Spat
                    September 11, 2000

                    By DANIEL PEARL
                    Staff Reporter of THE WALL STREET JOURNAL

                    A single, nonfatal traffic accident two years ago, in a country where
                    product litigation is rare and tire blowouts are common, helped spark
                    the raging dispute between Ford Motor Co. and its longtime tire
                    supplier, Bridgestone/Firestone Inc.

                                         A Ford Explorer lost a tire and overturned on a
                                         Riyadh, Saudi Arabia, expressway, says John C.
                                         Garthwaite, who until last month was national
                                         service manager of the Saudi Ford dealership, Al
                                         Jazirah Vehicle Agencies Inc. The first thing that
                    got Mr. Garthwaite's attention was the driver: the secretary of Al
                    Jazirah's president. And the second was the tire.

                    Mr. Garthwaite, of northeast England, had been getting scattered
                    complaints from customers about Explorer tire failures. But the tires
                    were generally in tatters, making it difficult to know if a puncture was to
                    blame. This time, he recalls, the left rear tire was fully inflated, and the
                    tread had simply separated.

                    Al Jazirah eventually persuaded Ford to offer replacement of Firestone
                    tires on existing Explorers throughout the Persian Gulf, at Ford's
                    expense. In March 1999, Ford also discussed upgrading the
                    specifications for tires on the 2000 Explorer in the Middle East, an
                    internal memo released last week shows. The company later decided to
                    cancel the 2000 and 2001 models entirely in the region; Ford says that
                    was a marketing decision based on high dealer stocks of 1999
                    Explorers. Ford hasn't said what tires the 2002 models will carry in the
                    Middle East. In the U.S., the new model, which debuts in January, was
                    set to carry either Michelin or Firestone tires, but last week Ford
                    acknowledged it was in talks to give part of the business to Goodyear.

                    Ford's actions in the Middle East came many months before Ford and
                    Firestone acknowledged any problem with Explorer tires elsewhere. On
                    Aug. 9, Firestone launched a recall of 6.5 million similar tires in the U.S.
                    Though the models and sizes are slightly different in the Middle East,
                    Ford and Firestone face criticism that they didn't alert U.S. officials
                    earlier to problems with Explorer tires overseas. In Tokyo, the president
                    of Bridgestone vowed Monday to deal decisively with the crisis.

                    In the Persian Gulf, Ford's tire-replacement project drew little attention.
                    Saudi officials took no notice until after the U.S. recall was announced.
                    Washington was unaware, too, even though some U.S. and British
                    government-operated Explorers were among those getting free new
                    tires in the Gulf. Ford says it accepted Firestone's assurances that
                    conditions in the Gulf were unique. A Firestone spokesman said the
                    company considers driving conditions in the Middle East "extreme and

                    The first complaints about Explorer tires in Saudi Arabia came in 1997
                    from a British Al Jazirah service manager in the eastern province.
                    Firestone blamed tire failures on underinflation, punctures, or improper
                    tire storage when the car was awaiting sale, Ford and Firestone officials
                    say. Firestone held recent seminars for Saudi car dealers, telling them to
                    avoid "flat spots" by overinflating tires and reparking showroom cars
                    every two weeks.

                    Mr. Garthwaite accepted Firestone's explanations until he saw the intact
                    left rear tire of the overturned Al Jazirah Explorer. "It could not be put
                    down to puncture or abuse," he says. John Thompson, operations
                    manager of Firestone's Saudi agent, recalls that five tires Firestone
                    shipped to the U.S. for testing came back with the following results:
                    Four tires had improper puncture repairs, and the fifth had low tire
                    pressure. But, he said, Mr. Garthwaite by now was more skeptical.

                    Mr. Garthwaite said he collected several more examples. Ford's regional
                    office in Dubai got involved. In January 1999, a memo shows, a Ford
                    official questioned whether Firestone was hiding something "to protect
                    them from a recall or lawsuit." The memo, from Ford's service manager
                    for Saudi Arabia, says, "We owe it to our customers and our
                    shareholders to make our own analysis of the tires."

                    Ford kept selling new Explorers with the same Firestone Wilderness AT
                    tires. But by March 1999, Firestone and Ford apparently had a plan to
                    convince Explorer drivers to change their original tires for more-durable
                    Firestone models, such as the Wilderness AT "special service" tire. A
                    separate Ford memo recounts a plan to install higher-grade tires on
                    new Explorers the company shipped to Saudi Arabia and to offer recent
                    Explorer buyers the option of upgrading their original tires. But
                    Firestone balked at sending Explorer owners a letter, for fear U.S.
                    authorities would have to be notified and the Saudi government would
                    "react dramatically," according to the memo, from Ford's world-wide
                    export division.

                    Talks continued. "We kept being told by Firestone that this was a
                    customer-usage issue," says James Benintende, Ford's executive
                    director for Middle East and North Africa. "We didn't have any real data
                    to confirm one thing or another."

                    Al Jazirah decided not to wait. A July 1999 bulletin sent from Al Jazirah's
                    Riyadh headquarters to service managers describes a "temporary
                    program": Al Jazirah would appoint Firestone-trained tire inspectors in
                    each branch. Any time a Ford Explorer came in for service with
                    Wilderness AT tires, the inspector would offer the customer a new set
                    of "special service" tires at a 75% discount. On Explorers in its
                    showroom, Al Jazirah started replacing Firestones with the
                    more-durable Firestones.

                    Ford decided against new Firestone tires, partly because of doubts
                    there were enough of the tires available. Instead, Explorer owners
                    would get new Goodyear tires, and the Explorers would be electronically
                    reprogrammed to reduce, slightly, the top speed. Ford says its dealers
                    began contacting Explorer owners in August 1999 and had reached "the
                    bulk" of them within a few months.

                    Ford didn't call the program a recall, and didn't raise a safety issue,
                    though the old tires were destroyed. Some Explorer owners in the
                    Persian Gulf say they never even heard about the replacement offer until
                    recently. Service managers in Kuwait and Qatar Ford dealerships said
                    they simply waited for customers to come in for regular service. Al
                    Jazirah officials say they've changed more than perhaps half of the
                    1,600 Explorers estimated to be on the road.

                               -- Stephen Power in Washington contributed to this article.