States Launch Joint Investigation Of Bridgestone, Ford Tire Recall
                    September 26, 2000

                    By TIMOTHY AEPPEL and KAREN LUNDEGAARD
                    Staff Reporters of THE WALL STREET JOURNAL

                    A group including about 40 state attorneys general joined forces to aid
                    their investigations into the handling by Bridgestone/Firestone Inc. and
                    Ford Motor Co. of a massive automobile-tire recall linked to 101 deaths.

                                         The group began forming during a conference
                                         call a week ago, and the chief legal officers from
                                         about 40 states participated in the most recent
                                         call, according to people familiar with the

                    Separately, Automotive Lease Guide, the bible for valuing new-vehicle
                    leases, has downgraded the value of the Ford Explorer, in part because
                    of the recent tire recall but also because it and other popular
                    sport-utility vehicles are fetching lower prices in an oversaturated

                    The guide's action could result in more-expensive leases on SUVs or
                    higher incentive costs for auto makers, since the ALG's values are
                    widely-followed benchmarks for setting lease terms for new vehicles.

                    Todd Boyer, a spokesman for Ohio Attorney General Betty
                    Montgomery, said cooperative efforts are common when a number of
                    states are "gathering, processing and issuing demands for information
                    from corporate entities." He said it would be a mistake to characterize
                    the group as forming a single investigative body.

                    But clearly, the creation of such a network could facilitate each state's
                    formal investigations. It also means Bridgestone/Firestone, a unit of
                    Japan's Bridgestone Corp., and Ford, of Dearborn, Mich., wouldn't have
                    to deal with dozens of state requests, which could slow the release of
                    data and prolong discovery. The states are expected to divvy up
                    responsibility for gathering different kinds of information and to
                    coordinate its flow. Some of the states, including South Carolina,
                    already have filed suit in connection with the recall. Others have
                    indicated that they haven't ruled out such action.

                    Federal investigators have
                    linked 101 deaths to tread
                    separations on Firestone
                    Wilderness AT, ATX and ATX II
                    tires, and many of those
                    fatalities allegedly occurred
                    when tires failed on Explorers
                    and caused the vehicles to roll
                    over. Both Ford and Firestone
                    have been criticized by
                    members of Congress,
                    consumer groups and plaintiffs
                    lawyers for failing to respond
                    soon enough to evidence of
                    problems with the recalled

                    John Lampe, executive vice president for Bridgestone/Firestone, said
                    the company was informed by Tennessee Attorney General Paul G.
                    Summers that a "multistate working group" has been formed. Mr.
                    Lampe said the tire company would be meeting with the group later this
                    week and "will be open and fully cooperative ... in sharing data and
                    other background.'' A spokeswoman for Mr. Summers said "this is a
                    working group. I couldn't tell you whether we're contemplating a

                    Mr. Lampe also took the opportunity to make sure the group was going
                    to look at Ford as well as Firestone. "We continue to believe that, in the
                    interest of public safety, the search for answers should focus on both
                    the vehicle and the tires," he said.

                    Susan Krusel, a Ford spokeswoman, said the auto maker isn't aware of
                    any inquiry by a multistate group of state attorneys general. She said
                    Ford has been contacted by the offices of attorney generals from seven
                    states -- Florida, Connecticut, Georgia, Maryland, Ohio, Tennessee and
                    California -- and is complying with their requests. "Certainly, we have
                    cooperated with government officials on this investigation to date, and
                    we intend to cooperate with state attorneys general as well to fulfill their
                    information needs," she said.

                    According to information received by Bridgestone/Firestone, those in
                    the multistate working group are: Alaska, Arizona, Arkansas, California,
                    Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa,
                    Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota,
                    Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New
                    Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South
                    Carolina, Tennessee, Texas, Vermont, Virginia, Washington, West
                    Virginia and Wisconsin, as well as the Commonwealth of Puerto Rico.

                    In the Automotive Lease Guide's most recent pricing schedule, the
                    Santa Barbara, Calif., research company hit Ford's Explorer with a
                    double whammy. The vehicle's projected residual value -- how much it is
                    predicted to fetch after being leased -- has sunk six percentage points
                    since last year, shaving $1,850 off the price when an Explorer comes off
                    lease. One-third of the decline is specifically due to the Firestone tire
                    recall, says Raj Sundaram, vice president at ALG.

                    But Mr. Sundaram had a sobering message for other auto makers in the
                    SUV segment: The vehicles' values "have definitely peaked." The supply
                    of used cars has increased, he said, and rising incentive spending on
                    new vehicles has softened used-car values.

                    Residual values have plummeted by about 15% since 1997 on full-size
                    SUVs and 14% on compact SUVs, according to the lease guide.

                    Write to Timothy Aeppel at and Karen
                    Lundegaard at