May 22, 2001

                    Major Business News

                    Bridgestone's Firestone Quits Relationship Of 95 Years as Supplier of Tires to Ford

                    Auto Company Is Accused of Refusing To Concede to SUV Safety Concerns

                    Staff Reporters of THE WALL STREET JOURNAL

                    Bridgestone/Firestone Inc., facing pressure from Ford Motor
                    Co. to recall millions more tires, abruptly ended its 95-year
                    relationship as a supplier to Ford and accused the auto maker
                    of refusing to acknowledge safety concerns about its
                    best-selling Explorer sport-utility vehicle.

                    Ford rejected Firestone's accusations, and moved ahead with
                    plans to announce Tuesday an initiative to offer
                    replacements for as many as 10 million to 15 million
                    Wilderness tires to customers who request them. The action
                    potentially could be bigger than last summer's
                    6.5-million-tire Firestone recall. Meanwhile, Ford Chief
                    Executive Officer Jacques Nasser arranged to press his case
                    on the Explorer's safety directly with key members of
                    Congress. Ford also said it would disclose Tuesday an
                    analysis of safety problems with Firestone Wilderness tires
                    currently on the road.

                    The acrimonious disintegration of the
                    Ford-Firestone relationship poses big
                    risks for the companies. Both are
                    struggling to regain customer confidence
                    in the wake of last summer's recall of
                    6.5 million 15-inch Wilderness, ATX and
                    ATX II tires that have been linked to 174
                    deaths and hundreds more injuries in the
                    U.S. alone, mainly involving rollovers of
                    Ford Explorers. The companies launched
                    separate efforts to quietly lay safety
                    concerns to rest by settling as many as
                    possible of hundreds of individual
                    lawsuits. The fact that each company is
                    now blaming the other for rollovers in
                    the Explorer resurrects the safety
                    controversy while handing plaintiffs'
                    lawyers ammunition to use in court.

                    "We couldn't possibly be in a better
                    situation in any case than to have the
                    two defendants fighting each other,"
                    said Miami plaintiffs' lawyer Mike Eidson,
                    co-lead plaintiffs' counsel for more than
                    200 individual death and injury cases
                    filed in federal courts nationwide against
                    Ford and Firestone. The cases have been
                    consolidated for pretrial purposes in U.S.
                    District Court in Indianapolis. "It's like a
                    malpractice case when the doctor and
                    the hospital blame each other," he

                    Firestone estimates that losing Ford as a
                    customer will cost the tire maker less
                    than 5% of its revenue, which totals
                    about $7.5 billion. Firestone's parent,
                    Japan's Bridgestone Corp., downplayed
                    Tuesday the impact of the breakup on
                    earnings. "We may revise in June or July
                    our group earnings estimates for the
                    current fiscal year ending December. But we don't think the
                    impact on our overall group sales will be big," a Bridgestone
                    spokeswoman said.

                    Bridgestone said its U.S. subsidiary's deal with Ford in North
                    and South America only accounts for about 1% to 1.5% of its
                    total group sales. Even the parent Bridgestone group's sales
                    to Ford, including sales in regions other than the Americas,
                    make up just 2% of its total group sales, Bridgestone said.

                    However, it remains to be seen how the severed relationship
                    will play out. Firestone has pledged to "fulfill our contractual
                    obligations." That means different things for different
                    vehicles, since auto makers award a separate contract for
                    each car model's tires. Rival tire makers, such as Goodyear
                    Tire & Rubber Co. and France's Groupe Michelin, have excess
                    capacity and will eagerly snap up new business -- particularly
                    if it promises to lock in future contracts with Ford.

                    Firestone launched its attack on Ford at a hastily called news
                    conference at the tire maker's Nashville, Tenn., headquarters.
                    Chief Executive John Lampe said Firestone hired an outside
                    expert to conduct a full engineering analysis of Ford's leading
                    SUV model. That study isn't complete, but Mr. Lampe said
                    the information they have already gathered "heightens our
                    concerns about the Ford Explorer."

                                      The attack hits Ford in a highly sensitive
                                      area. The Explorer is one of Ford's
                                      best-selling and most-popular vehicles, with
                                      more than four million on the road. Ford
                                      currently is launching a redesigned 2002
                                      Explorer four-door model that is critical to
                                      its profits at a time when U.S. and
                                      European margins are under pressure.

                                      Earlier Monday, Mr. Lampe, still hoping to
                                      avert a divorce, personally went to
                                      Nashville's charter airport to pick up a
                                      contingent of Ford officials. The meeting
                    was tense, with Ford first presenting information it had
                    gathered on tire problems, then Firestone presenting its own
                    material about the Explorer.

                    Ford officials say their interpretation of the Firestone claims
                    data for Wilderness tires is that, while the unrecalled
                    Wilderness tires don't have as serious a tread-separation
                    rate as those that were recalled last summer, there is still
                    enough evidence of a safety risk to warrant a substantial
                    widening of the tire recall. However, Firestone has refused to
                    broaden the recall.

                    According to Firestone officials, the critical moment of
                    Monday's meeting came when Mr. Lampe asked the Ford
                    officials whether they could then discuss how the two
                    companies could work together to look at the Explorer's role
                    in the accidents. The Ford officials declined. After, Mr. Lampe
                    sent a letter to Mr. Nasser, which said, "Our analysis
                    suggests that there are significant safety issues with a
                    substantial segment of Ford Explorers. We have made your
                    staff aware of our concerns. They have steadfastly refused to
                    acknowledge those issues."

                    People familiar with the situation say the crisis was brewing
                    for months. There was always a contingent inside the tire
                    maker that didn't want to trust Ford, while another insisted
                    they should seek to smooth things over. Even exchanging
                    documents had become a tense tug of war.

                    Mr. Lampe confirmed in an interview after the news
                    conference that Firestone agreed to hand over its updated
                    warranty-claims information to Ford on May 11. But he said
                    this decision came only after Ford agreed to produce figures
                    that would allow Firestone to compare the performance of its
                    tires on two separate Ford models, the Explorer and the
                    Ranger pickup.

                    "The day we got the Ranger data, we gave them our updated
                    figures," said Mr. Lampe. He emphasized that Firestone
                    wasn't seeking to conceal the warranty-claims information,
                    but rather had grown frustrated at Ford's refusal to discuss
                    the role of the Explorer in the accidents. Mr. Lampe said he
                    had personally appealed to Mr. Nasser last October to
                    cooperate on such work, but Ford never responded to
                    requests for such cooperation.

                    "We responded" to Mr. Lampe's proposals last October, a
                    Ford spokesman said late Monday. "The teams have been
                    working together and sharing information. They are looking at

                    In charts made available to the media, Firestone said
                    tread-separation claims occur as much as 10 times more
                    frequently on the Ford Explorer as on the Ranger pickup with
                    the same tires, based on a sample of claims data on Radial
                    ATX tires. For trucks equipped with Wilderness AT tires,
                    Firestone said there were no warranty claims for Ranger
                    rollovers linked to tread separation. However, rollover claims
                    for Explorers with these tires occurred at a rate of 23 per
                    million vehicles, the tire maker said.

                    In a statement Monday, Ford officials rejected Firestone's
                    charges about the Explorer, saying that for 10 years the
                    model "has ranked at or near the top in terms of safety
                    among the 12 SUVs in its class." And Ford said 2.9 million
                    Goodyear tires mounted on more than 500,000 Explorers have
                    "performed with industry-leading safety."

                    Ford stock was down 48 cents Monday to $26.65 in 4 p.m.
                    New York Stock Exchange composite trading.

                    The sudden outbreak of warfare between Ford and Firestone
                    comes after months during which the two companies said
                    they were trying to cooperate to resolve a continuing federal
                    investigation into the causes of the catastrophic
                    tread-separation accidents. The rupture ends an unusually
                    close commercial alliance that began in the early 1900s,
                    when Henry Ford first tapped Harvey Firestone's company to
                    make tires for Ford cars. That alliance led to more-personal
                    ties between the Ford and Firestone families: Current Ford
                    Chairman William Clay Ford Jr.'s mother is a Firestone.

                    Meanwhile, executives from Ford and Firestone were working
                    aggressively Monday to head off any possible backlash from
                    Capitol Hill. Ford's Mr. Nasser scheduled a meeting for
                    Tuesday with the chairman of the House Commerce
                    Committee, Rep. W.J. "Billy" Tauzin (R., La.), who led last
                    fall's hearings on the Firestone recall and was one of the
                    toughest critics in Congress of both companies. Separately,
                    Firestone's Mr. Lampe sent Mr. Tauzin a letter early Monday
                    informing him of the company's decision to terminate its
                    business dealings with Ford. He also said he spoke with Mr.
                    Tauzin by phone.

                    -- Milo Geyelin contributed to this article.

                    Write to Timothy Aeppel at, Joseph
                    B. White at and Stephen Power at