July 23, 2001
By STEPHEN POWER and CLARE
ANSBERRY
Staff Reporters of THE
WALL STREET
JOURNAL
As federal safety regulators prepare to declare that millions more tires made by Bridgestone/Firestone Inc. are unsafe and should be recalled, the company is digging in for a prolonged legal battle whose ramifications are already causing concern in the tire-making industry.
The National Highway Traffic Safety Administration is preparing to release an "initial determination" of a defect in the tires as early as this week, the first step in the agency's process for ordering a recall. Firestone would be given a chance to defend its product. NHTSA could then make a "final determination" of a defect and -- if the company refuses to broaden the recall -- ask the Justice Department to file suit to force Firestone to comply. The company has vowed to fight such an action.
The safety agency hasn't identified the tires it believes are defective or indicated what it thinks is wrong with them, though tread-separation rates, which have received much attention since last year's tire recall, likely have played a major role in the analysis. People familiar with the investigation say the tires in question are Wilderness AT tires in two sizes and from certain plants: the 235/75 R15 made in Joliette, Quebec, and Wilson, N.C., and the size 255/70 R16 made in the Joliette, Wilson and Decatur, Ill., plants.
Other tire makers are anxious that federal safety officials, in ordering a broader recall, might be setting a performance standard that is hard for the industry to live up to. Tire makers say the rate of tread separations isn't necessarily an indicator of a tire's safety, since treads may separate after a tire runs over a nail on the road and have nothing to do with how the tire is made. Moreover, all tires can experience tread separations. "There's a real problem using this data as a standard," says John Perduyn, senior vice president, global communications, at Goodyear Tire & Rubber Co.
Firestone's determination to fight NHTSA's push for a broader recall is fraught with risk, in essence pitting it against the federal government in a city where, until this year, it didn't even have an office. But, the tire maker felt it had little choice. Ever since the recall last summer of 6.5 million Firestone tires that were linked to more than 200 deaths in the U.S., the company has been trying to convince the public that it had identified and remedied the problem. Agreeing to a new recall, which necessarily would include a determination of a defect, would further erode what is left of the company's credibility.
Firestone, which has conducted extensive tests of its tires and those of its competitors, insists its tires currently in use are safe. The company also claims the design of Ford Motor Co.'s Explorer sport-utility vehicle, on which most of the previously recalled tires were mounted, is a factor in tire failures leading to deadly rollovers. Ford repeatedly has said its vehicle is safe and that the tires are at fault.
"We absolutely believe our data prove our point," said Firestone spokeswoman Jill Bratina. "We are not going to replace safe tires with safe tires."
Firestone is moving to shore up support. Friday, John Lampe, chairman and chief executive of the Nashville, Tenn., company, flew to Washington and met with House Commerce Committee Chairman W.J. "Billy" Tauzin (R., La.) and other lawmakers to reiterate the company's defense of its tires. Firestone also contacted its dealers and retailers to explain its challenge to NHTSA. Its parent, Japan's Bridgestone Corp., said last week it supported the U.S. unit's stand.
Mr. Tauzin, who has conducted hearings on the tire debacle, plans this month to meet with Venezuelan lawmakers overseeing their government's investigation of deadly accidents involving Firestone tires and Ford Explorers. Mr. Tauzin's spokesman said Venezuelan officials had requested a meeting in Washington with him and other Commerce Committee members to "exchange information that may be useful in our separate investigations."
Battling a government-ordered recall, while rare, isn't unprecedented. Over the past three decades, NHTSA has sued manufacturers fewer than a dozen times to force recalls, and in many cases the companies eventually agreed to do so or were ordered to by a federal court. Legal observers say Firestone's position mirrors that of Chrysler Corp. in the late 1990s, when the auto maker fought a recall order involving 1995 Chrysler Cirrus and Dodge Stratus cars. The agency said the cars' seat belts weren't anchored properly. After losing in federal court, Chrysler won on appeal by arguing that NHTSA had used vague and improper test protocols.
Meanwhile, Firestone continues to fight on other legal fronts. The company already has settled 200, or 40% of the total outstanding, of the claims and lawsuits against it related to its tire crisis from last year. If NHTSA does find that additional Firestone tires are defective, this is expected to give a boost to plaintiffs' lawyers but isn't expected to be critical.