By JEFFREY BALL and JOSEPH B. WHITE
Staff Reporters of THE WALL STREET JOURNAL
DEARBORN, Mich. -- Ford Motor Co. Chairman William Clay Ford Jr. is
moving closer to the front lines of his company's fight to repair the
damage done by the Firestone tire recall.
"Anything that affects the reputation of the
Ford Motor Co. is of vital interest to me," he
said Thursday, explaining his decision to speak
out about the tire mess. His comments came
after weeks in which the company's chief
executive officer, Jacques Nasser, was the highest-ranking Ford
executive to address the issue in public.
Clearly, with the Firestone debacle showing no signs of mitigating, Mr.
Ford feels compelled to throw his voice and power behind a crisis that is
increasingly testing his company's reputation. Thursday, in an interview,
Mr. Ford said Ford's board will closely monitor management's actions in
the tire matter, and that he personally will be involved in the company's
response. Despite his new role, Mr. Ford expressed strong support for
Mr. Nasser's handling of the matter, and said he agreed based on data
presented to the board that the problem isn't with Ford's Explorer
sport utility vehicles but with Firestone's tires.
But it's also clear that Mr. Ford has decided the time
has come to tackle head-on the doubts about
Ford's credibility that have colored the recall since
the problems first began getting public attention
earlier this year. Indeed, the Firestone situation also
shows that corporations that want to be seen as
socially progressive must assume responsibility for
problems that affect their products -- even when
evidence suggests those problems might be the
fault of their suppliers.
"The business system [Ford] had allowed this to
occur. And the business system they had is a wall
between them and Firestone," says Matt Arnold,
senior vice president of the Washington-based World Resources
Institute and one of the participants in a retreat Ford sponsored last
month to solicit input from some of its longtime critics. "That's got to
change. The reality is, they're accountable for everything that's in that
Despite his promises to act, Mr. Ford admitted he didn't "have a game
plan yet" for what role he should take in the company's response to the
crisis. He also said it was too early to draw concrete lessons from the
emergency; Bridgestone/Firestone Inc. has recalled 6.5 million Firestone
tires, most of which were mounted on Explorers, because of reports
that the tires' treads can peel off, causing the Explorers to roll over.
The tires are allegedly linked to 88 deaths and more than 1,400
accidents in the U.S. over the past decade, plus at least five more
deaths since Bridgestone/Firestone began its recall August 9. "It's hard
to gain perspective when you're out there trying to get good tires on
vehicles," he said.
But Mr. Ford acknowledged that part of his job, and the rest of the
Ford board of directors, will be to convince the public that the auto
maker is being honest, and doing all it can. "How do you make a
company honest and open? It's hard," he said. "It's what I expect. This
is what I demand. Are we going to get it right over night? No. You don't
ever declare victory."
The Firestone debacle shows how brittle the image of the new company
culture is that Mr. Ford, 43 years old, has been trying to create since
taking his post in January 1999. Many big companies at times have been
criticized for too often dismissing critics of products and policies, only to
be embarrassed later when some of those complaints are validated.
Such episodes undermine the rhetoric from company executives,
including Mr. Ford, about making the customer "job one."
For more than a year, Mr. Ford and his top executives have been
meeting behind closed doors with some of their harshest environmental
and social critics. The most dramatic meeting came at the retreat last
month, when about 30 of Ford's top executives sat down for two days
with leaders of a dozen outside activist groups and other corporations,
at a country club in Dearborn built by Mr. Ford's great-grandfather,
Henry Ford. The goal: to improve communication with the outside world
precisely so the company could avert disasters such as the Firestone
The activists Ford has been meeting with "don't expect us to be perfect.
They expect us to be open and honest and responsive," Mr. Ford said.
That demand is "extremely relevant" to the Firestone imbroglio, he
added. "Society needs to be comfortable with us."
But some of those outsiders say they aren't terribly impressed by the
way the company has handled the tire crisis so far. In pinning most of
the blame on Firestone, Mr. Nasser "has taken a pretty tough stand,"
says John Elkington, a London consultant the auto maker has hired to
broker discussions between its executives and outside environmental
and social groups.
That strategy may be legally advisable, he believes, but it doesn't do
much to build the auto maker's image as a good corporate citizen in the
minds of consumers. Instead, Mr. Elkington believes, Ford should be
"overreacting" to the Firestone crisis in a bid to win consumers' trust.
He cities as a model the response by British Petroleum, now BP Amoco
Corp., to an oil spill off the coast of Huntington Beach, Calif., in 1990.
Although the ship involved, the American Trader, wasn't owned by BP,
the oil was BP's, and so BP offered to help clean it up. "BP just waded in
and said, 'It doesn't matter who's got the problem, it impacts us all,'"
says Mr. Elkington. "It doesn't matter what it costs, because in the long
term, it will be good for our reputation."
Mr. Ford insists his company has gone the extra mile: "We're the ones
that crunched the data" that showed a strong pattern of defects in
certain Firestone Wilderness AT tires built at the tire company's
Decatur, Ill. plant. "We're sharing the cost of the recall where it isn't our
obligation.'" Ford has taken actions like paying for new tire molds to
expand replacement tire production, and extending allowances for
customers to get replacement vehicles while waiting for tires for their
Explorers, he noted. "The real answer is to get tires out there," he said.
A central question in the Firestone recall is why both the tire maker and
Ford took so long to grasp that what appeared to be isolated cases of
treads peeling off Firestone tires on Ford Explorers was, in fact, a
potentially deadly trend. The delay points to the need for big
corporations, particularly ones whose products can pose such dangers
to consumers, to "break weak signals out of the background noise and
really start to work on them earlier than the traditional business model
would encourage you to do," Mr. Elkington says.
Under the rubric of corporate responsibility, a number of multinational
corporations in recent years have begun reaching out to their critics in
an effort to avoid -- or avoid repeating -- embarrassing environmental
or safety-related run-ins that could badly damage their reputations.
Among them is Royal Dutch/Shell Group Inc., which was forced to
abandon its plan to dispose of its massive Brent Spar oil platform in the
North Sea in the 1990s amid massive public protests over the potential
environmental effects of the move. Shell, indeed, sent a representative
to Ford's country-club meeting with activists last month. In addition,
Ford held a similar meeting with activists in recent weeks in conjunction
with BP. BP has launched its "beyond petroleum" campaign, in which it is
talking more about alternative energy sources, seeking to recreate itself
in a more socially enlightened image.
The lessons of Ford's discussions with its critics, and the implications
those talks on how the company should handle the Firestone imbroglio
from this point forward, are scheduled to be discussed at a meeting of
Mr. Nasser and his top lieutenants on Monday. But already, say several
of the participants in the talks, the dialogue has produced results.
Had Ford not reached out to its critics before the Firestone crisis
erupted, the debacle "would have been seen in the activist community
as one more bit of proof that this company was unresponsive at best
and destructive at worst," says one of the people who was at the recent
country-club retreat. Now those activists are holding their public fire,
giving the auto maker "the benefit of the doubt." But they haven't been
won over. If evidence emerges that Ford's current top leadership,
particularly Mr. Ford, was aware of the tire problem but concealed the
knowledge, says this person, "we'll blow them out of the water."