Focus Named ‘Car of the Year 2000’ In USA
Journalists at the Detroit Motor Show have voted the Ford Focus ‘Car of the Year 2000’. The Focus is produced in Germany, Spain and the USA.
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Ford “Has No Plans To Drop Firestone”
Product NewsJason Vines, Ford Vice President, has said that the company has no plans to drop Firestone as a tyre supplier, although the relationship will be reviewed “on a day-to-day basis”. Ford’s new Explorer 2002 SUV (on the market next year) will be fitted with Firestone tyres, but tyres from another manufacturer, thought to be Michelin, will also be offered.
Explorer Sales Unaffected For Now In The US
Product NewsSeptember sales figures for the Ford Explorer – the vehicle at the centre of the Firestone tyre recall – were higher than for the same month last year at 37,510 (37,119). Ford expects sales to drop over the next few months, due in part to the company ceasing vehicle manufacture temporarily in order to make more tyres available to the aftermarket.
Bad News For British OE Suppliers
Product NewsThe bad news for British oe suppliers continues. It is still uncertain what will happen to Rover Cars; Honda wants to cut production by more than 50 per cent, and there are rumours that Ford plans to close its Dagenham plant as a result of European overcapacity.
Pirelli With Ford In World Rally Championships
Product NewsPirelli will supply the Ford Focus WRC from the beginning of 2001 in the World Rally Championships. Drivers will be Colin McRae and Carlos Sainz. Pirelli also equips Subaru with rally tyres as part of a long-term contract and cooperates with Seat.
Shares In Ford Fall
Product NewsBridgestone is not the only company whose share price has suffered because of the tyre recall, as Ford’s stock has slipped from $29 at the beginning of August to just over $25 this week. Although this is nothing like the scale of the Bridgestone fall, it comes at an embarrassing time, as Ford was widely expected to announce a plan to buy back more than $4 bn worth of its own stock. Whereas the falling share price makes such a move even more desirable, many experts believe that to do it now would be a public relations disaster.
Surgery For The English Patient
Product NewsThe news that BMW was going to sell its loss-making (1999 losses alone were 1 billion Euros) subsidiary Rover provoked an understandably strong reaction in Britain. Some estimated that 50,000 jobs (including those of suppliers) could be lost and BMW’s name was mud with workers, unions and the British Government, which accused BMW of lying. Undeterred, BMW began breaking up the Rover group, selling Land Rover to Ford for 3 billion Euros and the Longbridge car factory to venture capitalists Alchemy Partners, with BMW writing off debts of £2 million. BMW is retaining the factory at Cowley, where the new Mini will be made. Alchemy plans to re-name Rover as MG Cars and to move away from volume production to make sports cars and sports saloons. This would keep the Longbridge factory open, but with a much reduced workforce. Amid the thousands of paragraphs criticising BMW, some industry pundits have questioned the vulnerability of the German group and there are rumours of larger companies (VW and Ford are two who have been mentioned) sniffing around BMW. The major shareholder in BMW is the Quandt family, whose members insist that the company will remain independent. More details in the April issue of TYRES & ACCESSORIES.
Ford’s Behaviour Examined More Critically
Product NewsFord has conceded that it was aware of problems with Firestone tyres in Venezuela as long ago as 1998. Ford CEO Nasser admitted two weeks ago that, in Venezuela, not only had the tyres been changed, but modifications had been made to the vehicle suspension. Analysts said that attempts to place the entire responsibility upon Firestone have failed.
“No Defects Found In Recalled Tyres”
Product NewsBridgestone/Firestone’s chief executive in the USA, John Lampe, has said that the company has not found a defect in its recalled tyres, but he did say that there was “a safety issue with a small percentage.” Lampe’s definition of a defect is “something you can point to and say ‘there is the cause’ and we haven’t been able to find a cause or combination of causes.” He added that he believes the tyres only pose a safety problem when fitted to Ford Explorers.
French Car Manufacturers Do Well In France
International News, NewsDespite a slight fall in new car registrations in France during April, the market so far this year has risen 6% compared to 1999. French manufacturers have done exceptionally well, with Renault sales up 6% and Peugeot up 12%. Not so happy in April were Fiat (down 28%) and Ford (down 25%).
Investors Better Off With GM Shares Instead Of Ford
Product NewsAnalysts are recommending investment in GM rather than Ford. Ford is under the public microscope and the focus of analysts. This week, the shares have fallen 13%, representing damage to the group of more than US$ 10 bn. The management is accused of having known about the problems – which have led to the voluntary recall of Firestone tyres – for around two years. Consumer groups and official authorities want an answer to the question whether Ford has worked (ie changed or improved) on the suspension of its vehicles in Venezuela in order to overcome the problems there. The reaction at the stock exchange has probably gone far too far, as, even if the company had to mount a vehicle recall, the figure of US$ 10 bn is too high. The real costs, if any, would be in the region of US$ 1 bn or less.
Recall Burdens Ford Results
Product NewsFord Motor Company has suffered a reduced profit of 888 million US-$ in the third quarter, compared to the same period for 1999 (959 m). Ford Chairman Jacques Nasser attributes the results to the Firestone recall. To provide good tyres to Ford customers is more important than realising short term profits.
100 Years Of Firestone
Product NewsHarvey Firestone established his sales company for tyres and technical rubber products in the summer of 1900 and began production of tyres in Akron, Ohio, three years later. Thanks to a big order from Ford for the famous model T, the company was immediately successful and grew rapidly. In the twenties, Firestone was, for some years, the biggest tyre manufacturer in the world. Due to a badly-managed recall in the late seventies, the company ran into extreme difficulties; it tried to avoid the recall, but eventually its hand was forced, severely damaging the company’s reputation as a result. After this episode, the Firestone management was forced to sell assets every year to plug the biggest holes in the balance sheet. John Nevin was appointed CEO, but despite his extremely strict guidance, which was focused purely on shareholders, he did not manage to turn the company around. In 1988 Bridgestone acquired Firestone, turning the Japanese company into a true global player overnight. This was Firestone’s only realistic hope for survival. Today, Firestone is once again a world-famous and accepted tyre brand, very successful in the US and also in Europe. The revitalisation of the brand was made possible through its involvement in motorsports, especially the Indy series in the US. In May, the famous Indianapolis 500 race was won by a car fitted with Firestone tyres – this was the 51st such victory for Firestone in the history of the Indy 500. Full details can be found in the June edition of NEUE REIFENZEITUNG.
Ford Award For Hankook
Product NewsThe Ford Motor Company in Dearborn has bestowed its Q1 award on Hankook’s tyre plant in Taejon, which produces light truck tyres for Ford. The factory is located 130 km south of Seoul and produces 65,000 passenger car and light truck tyres daily.
Firestone/Ford Issue Hits Courts
Product NewsLawyers from both plaintiffs and defendants argued in front of a panel of federal judges in Washington as they tried to decide how to deal with the 200 pending lawsuits. The judges will decide within two weeks whether to combine all the evidence and gather all the suits in one process. Ford, Firestone and lawyers for some plaintiffs argued for consolidation, saying it would simplify the process. Others say it might drag out the process unnecessarily. The multi-district panel hearing has caused the postponement of a hearing scheduled for 16th October. This latter case being sought by the Center for Auto Safety (Ralph Nadar’s organisation), seeks to widen the recall of Bridgestone/Firestone tyres. The alleged death toll has risen to 119, with injuries increasing to 500, according to the National Highway Traffic Safety Administration.
