Ford and Firestone

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In the summer of 2001, Ford recalled 13 million Firestone tyres. Discuss Ford and Firestone’s handling of stakeholder issues and the outcomes that resulted from this crisis. What learning points do you take away from this story? In 1999, car users worldwide were jolted by the high death tolls caused by faulty Firestone tyres and Ford Explorer cars. As of 6 December 2000, there have been 148 reported deaths and over 500 serious injuries1. It would have been very likely that people would shun Ford and Firestone products from then on due to their perceived danger, which made Ford and Firestone’s management of one of their biggest stakeholders- their customers and the victims of the accidents- extremely important. On the whole, Ford and Firestone’s handling of stakeholder issues were not exemplary. Victims of their faulty products were not properly informed beforehand of the risks, compensation to them was reluctant and mostly delayed, the two companies played the blame game, and many jobs were lost in the process. As such, I feel that Ford and Firestone handled stakeholder issues poorly, and although certain measures were implemented after the incident, I feel that they were insufficient, tardy and unhelpful in regaining customer loyalty. As a result, outcomes of the crisis were less than desirable. From this, we are able to gain many valuable lessons so that these mistakes would not have been made in vain. The largest shortcoming of how Ford and Firestone handled the situation was that they refused to accept responsibility for the product failure. Instead, they shifted the blame to each other, citing the wrong tyre pressure as a reason. Ford claimed that it was a Firestone tire issue2, while Firestone said it continued to stand by the tires3. Such claims were hardly believable

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