Assessment: The Ford/Firestone Hearings

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Ford CEO Jacques Nasser before the House committee

There was more heat than light yesterday as a House committee began hearings into the tangled relationship between the Ford Motor Co. and Bridgestone/Firestone. Firestone CEO John Lampe and Ford head Jaques Nasser presented widely differing explanations for safety problems with the Ford Explorer equipped with Firestone's Wilderness AT tires, and the committee chair, Louisiana Rep. Billy Tauzin, muddied things further by suggesting that seven of the tire models Ford is using as replacements might have higher failure rates than the Firestone tires. TIME's John Greenwald has been covering the Ford/Firestone inquiry and he spoke with about how the hearings are likely to affect the two companies.

What does Washington want out of these hearings? Should we look for any dramatic results or declarations?

John Greenwald:Congress has oversight over the National Highway Traffic Safety Administration. Billy Tauzin wants to ascertain whether the NHTSA has been doing all it can to ensure the safety of the vehicles Americans are driving, including the Ford Explorer. And, of course, both Ford and Firestone blame the other for the vehicles' safety problems — and the some 200 deaths that have been linked to the cars. So this inquiry raises serious questions about both corporate accountability and national safety standards.

Can Ford and Firestone salvage their reputations at this point? Is one company worse off than the other?

They're both in big trouble. In many ways, if you were to design a strategy to maximize the damage to two companies and minimize the benefits, you'd be hard-pressed to come up with a scenario more efficient than this inquiry and investigative process.

At this point, the Firestone brand is in peril. Bridgestone, Firestone's Japanese parent company, could decide it can't market the Firestone brand anymore, and might replace it with the Japanese-produced Bridgestone brand, which has remained pretty unsullied by this process.

Ford's peril is in many ways greater. They are trying to remake themselves as a consumer-sensitive company that listens to consumers and environmentalists. They want to come across as bunch of nice guys — and now this inquiry has severely hurt their credibility. Sales of the 2002 Explorer, which is a completely redesigned vehicle, have been very slow. The fear for Ford is that they will lose ground in America to imports.

Both companies are trying to place the blame on each other — and that can only backfire and make the situation worse for both of them. At this point they need to do something that seems highly unlikely: They need to come forward and say, hey, this is not a problem of Firestone tires or of Ford Explorers. It's a problem of the combination of a certain model Ford Explorer equipped with Wilderness AT Tires.

What message do these hearings send to consumers?

I think people feel okay about buying Explorers, although the NHTSA is now deliberating whether to do a separate inquiry into Ford's safety standards.

As for Firestone, I think there's a major cloud over that brand and I'm not sure it will recover in the eyes of consumers.

There's a bit of irony in this case. Ford argues, with some justification, that the Explorer's rollover rate is really pretty good. And they're right: Compared to the 12 other vehicles in the SUV class, the Explorer ranks third best in the field. The problem is that there are so many of these things on the road, and that volume is going to exaggerate any incidence of accidents.

Ford actually came up with a vehicle that's pretty good as far as its class (SUV) goes. It's just that when you put those tires on a class that's already relatively prone to rollovers, you've got a problem.