Ford And Firestone Separation: Not Just About Tires

Dec. 21, 2004

Trust emerges as the critical issue.

The still-unfolding story of Bridgestone/Firestone Inc.'s business separation from Ford Motor Co. could, in its own way, become as much of an instructive management tale as was Johnson & Johnson's handling of the Tylenol tampering crisis in the 1980s. Improbable as it may seem, since it contradicts a classic management mantra, one possible lesson from the continuing imbroglio between Ford and Firestone over tire and vehicle safety is that the customer is not king. "There is a consistent misunderstanding about the customer always being right. The truth is that the customers who do things within the norms of business and society are the ones who are always right," contends Brendan Tobin, president of the Tobin Group, a management consulting firm based in Tinton Falls, N.J. "There is nothing wrong with cutting off a customer who ends up being a drag on your business, and clearly Firestone felt Ford was just that," he asserts. The most powerful lesson likely to emerge from the unprecedented event, however, is a renewed recognition of the critical need for trust to exist between manufacturing supply-chain partners. Indeed, John T. Lampe, chairman, CEO, and president of Bridgestone/Firestone, a unit of Japan's Bridgestone Corp., made just that point in his May 21 letter to Jacques Nasser, Ford's president and CEO, in which Firestone fired Ford as a customer in the Americas. "Business relationships, like personal ones, are built upon trust and mutual respect," said Lampe. "We have come to the conclusion that we can no longer supply tires to Ford since the basic foundation of our relationship has been seriously eroded." Fred Beier, a professor at the University of Minnesota's Carlson School of Management in Minneapolis, says he first sensed a trust problem between Ford and Firestone many months ago when the first recall of Firestone ATX and Wilderness AT tires was announced. Each company pointed a finger at the other and said in so many words, "It's your fault." For Ford, Firestone tires were the safety issue; for Firestone, some Ford Explorer SUVs were the problem. Such finger-pointing is an "unusual reaction for two supply-chain partners," emphasizes Beier. "Supply-chain relationships are built on trust, and when you have a problem, you don't run to the lawyers, you run to your partner." Marc Drizin sounds a similar theme. There are two issues Ford and Firestone have to deal with, the product "problem" and the ethical issue of "how do we work with our partner's problem," says Drizin, a vice president at Indianapolis-based Walker Information Inc., a company whose research portfolio includes work on corporate reputations and ethics. "The answer [to the problems] shouldn't be that the first thing you do is to place blame," stresses Drizin. "The first thing you should do is make sure that the end-customer is safe," he stresses. Not surprisingly, Drizin applauds Johnson & Johnson for pulling its Tylenol brand from store shelves after tampering was discovered. "They put the consumer first," he emphasizes. Beyond first steps, the extent of Ford's success in expanding to new tire suppliers the integrated systems that provide order, inventory, and forecast data could provide another helpful manufacturing management lesson. So, too, could the degree of success Ford has in persuading tire suppliers to quickly ramp-up their production levels to fill the Firestone void. And once all the details come to light, Firestone's actions and words could produce a lesson in the crisis management of quality issues. In the meantime, both Ford and Firestone clearly face major challenges in rebuilding their public images. "They certainly circled the wagons and shot at each other enough," quips Marvin Goldberg, professor of marketing at Pennsylvania State University's Smeal College of Business in University Park, Pa. Ford will have the easier job, believes Goldberg. "Tactically they've seemed to have been reasonably effective at pointing the finger at Firestone. But also I think it's easier for them to differentiate their product line so that in the public's mind Ford has many products and the Explorer is only one," Goldberg says. "What is glaringly absent [are] Firestone's efforts to say, 'We have identified the problem, clarified it, removed it, and [are] going on,'" Goldberg claims. Without getting into the blame game, David Gebler, president and founder of the Working Values Group Ltd., a Boston-based consulting firm, suggests Firestone has a significant opportunity to reassert values-based ethics as part of its recovery process. "I have not seen Firestone's code of conduct -- or their values. But . . . there's a strong chance that honesty is somewhere in there as a value within the organization," Gebler surmises. "My hope is that what [Firestone CEO Lampe] is trying to do is to establish that there is a level of disclosure and honesty that is going to be the hallmark of their rebuilding process."

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.