-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VPZtYewUiOwSd32vsy5rF86sHTO2iLwYkfLp9pFSJTH1QM5w9UelGN+QUvM6h1fC NKD0Gbs13WWYgCb/MkzlwA== /in/edgar/work/20000908/0000037996-00-000091/0000037996-00-000091.txt : 20000922 0000037996-00-000091.hdr.sgml : 20000922 ACCESSION NUMBER: 0000037996-00-000091 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000809 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000908 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORD MOTOR CO CENTRAL INDEX KEY: 0000037996 STANDARD INDUSTRIAL CLASSIFICATION: [3711 ] IRS NUMBER: 380549190 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-19660 FILM NUMBER: 718708 BUSINESS ADDRESS: STREET 1: ONE AMERICAN ROAD CITY: DEARBORN STATE: MI ZIP: 48121 BUSINESS PHONE: 3133223000 8-K 1 0001.txt PRESS RELEASE SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report August 9, 2000 -------------- (Date of earliest event reported) FORD MOTOR COMPANY ------------------ (Exact name of registrant as specified in its charter) Delaware -------- (State or other jurisdiction of incorporation) 1-3950 38-0549190 ------ ---------- (Commission File Number) (IRS Employer Identification No.) One American Road, Dearborn, Michigan 48126 - -------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 313-322-3000 ------------ -2- Item 5. Other Events. - --------------------- On August 9, 2000, Bridgestone/Firestone, Inc. ("Firestone") announced a recall of all Firestone Radial ATX and Radial ATX II tires in size P235/75R15 produced in North America since 1991 and all Wilderness AT tires of that same size manufactured at Firestone's Decatur, IL plant. At the time the recall was announced, Firestone estimated that about 6.5 million of the affected tires were still in service. The recall was announced following an analysis by Ford and Firestone that determined there was a statistically significant incidence of tread separation occurring in the affected tires. Most of the affected tires were installed as original equipment on our Explorer, Mountaineer and Ranger models and on Mazda's Navajo and B Series models (which are manufactured by Ford and sold to Mazda). Under the recall, owners and lessees of those and any other Ford or Mazda vehicles with the affected tires are being asked to bring their vehicles to a Ford, Mazda or Firestone dealer for free replacement tires. Alternatively, customers can have the tires replaced at other tire dealers with tires of another manufacturer and be reimbursed up to $100 per affected tire. Because of the magnitude of the recall and the limited supply of appropriately sized replacement tires from all tire manufacturers, we expect the recall to take several months to complete. As of September 6, 2000, we estimate that about 30% of the estimated 6.5 million affected tires have been replaced. We have preliminarily agreed to bear a portion of the costs of Firestone's recall. In addition, we have suspended production of Explorer, Mountaineer, Ranger and B Series models for the two-week period beginning August 28, 2000, which will allow us to divert about 70,000 replacement tires for use in the recall. Although we expect these actions to reduce revenues and increase costs, it is too early to assess their overall financial impact in the second half of 2000. At this point, neither Ford nor Firestone has determined the root cause of any defect in the affected tires. The National Highway Traffic Safety Administration ("NHTSA") is investigating this matter and could conclude that the recall should be expanded to include other Firestone tires. On September 1, 2000, NHTSA released a Consumer Advisory, suggesting the scope of the recall could be expanded and recommending that owners of vehicles with certain models and sizes of Firestone tires not already being recalled take a number of actions to enhance their safety. Additionally, Congressional hearings on this matter began on September 6, 2000, at which Ford's Chief Executive Officer, Jac Nasser, has testified. In addition, governmental authorities in Venezuela are conducting an investigation relating to accidents involving Explorers equipped with Firestone tires. Ford of Venezuela launched an Owner Notification Program ("ONP") in May 2000 to customers with Explorers equipped with Firestone tires. The ONP included tires produced both in Venezuela and in North America. We have found that many of these recalled tires were not built to our specifications. An agency of the Venezuelan government, INDECU, has recommended an investigation to determine whether possible criminal charges should be brought against both Ford and Firestone. INDECU has also indicated its intention to pursue a civil case against Ford of Venezuela to seek monetary compensation for victims of tread separation accidents, civil penalties, and a recall of all 1996 - 1999 Explorers to retrofit them with stiffer shock absorbers. -3- On September 5, 2000, Firestone announced its own recall of the same tires already covered by Ford of Venezuela's ONP. As a result of the Firestone tire recall, there have been several new individual personal injury lawsuits and class action lawsuits filed against Ford and Firestone in state and federal courts across the country. Although the number of new filings increases almost daily, there are approximately 63 personal injury lawsuits and 35 class action lawsuits pending against Ford. Among other things, the class actions seek to expand the scope of the recall to include other tires and to award to consumers the cost of replacing those tires. Several of the individual personal injury lawsuits and class actions also seek punitive damages. Mr. Nasser's statement made at an August 31, 2000 press conference and his statement made at the September 6, 2000 hearing before a joint session of the House Subcommittees on Consumer Protection and Government Oversight, filed as Exhibits 99.1 and 99.2, respectively, to this report, are incorporated by reference herein. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. EXHIBITS -------- Designation Description Method of Filing - ----------- ----------- ---------------- Exhibit 99.1 Press Conference Statement Filed with this Report Dated August 31, 2000 Exhibit 99.2 Hearing Statement Filed with this Report Dated September 6, 2000 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the date indicated. FORD MOTOR COMPANY ------------------------------- (Registrant) Date: September 8, 2000 By: /s/Kathryn S. Lamping --------------------------- Kathryn S. Lamping Assistant Secretary -4- EXHIBIT INDEX ------------- Designation Description - ----------- ----------- Exhibit 99.1 Press Conference Statement Dated August 31, 2000 Exhibit 99.2 Hearing Statement Dated September 6, 2000 EX-99.1 2 0002.txt EXHIBIT 99.1 Exhibit 99.1 Since we first found out about the Firestone tire problem, we have been guided by three principles. First, we are doing whatever it takes to guarantee our customers' safety. We're committed not only to their physical safety but also to making sure they feel secure when driving a vehicle on tires that are safe. Second, we are working hard to find and replace bad tires with new good tires. That includes making sure that we understand the scope of the problem and make every effort to find out what the root cause of the problem is. Third, we will continue to be open about any data, statistics and information that we have as soon as we know we have a problem. One of the most difficult things in dealing with this type of problem is that we don't know all the facts, and it takes some time to gather and analyze all the information. And we want to be very careful not to say anything that is not supported by the facts or say something based on poor information that turns out to be incorrect later. Because I don't want there to be any question about our objective to make everything we know and what actions we're taking public, I have decided to personally testify at the congressional hearings next week. When it appeared this was purely a technical matter, I was comfortable letting our technical experts testify. It's clear some people want to broaden this tire problem into a larger issue, so I want to testify personally. Now, let's talk about where we are in the tire recall process. First, this is a tire and not a vehicle issue. We have a half-million vehicles with tires from other manufacturers, and they haven't experienced these problems. We believe that we know which tires are the problem. We have made a detailed analysis of the Firestone data (which is the only comprehensive data covering this matter), and we have made our analysis available to our customers, to the public, to Firestone, to the media and to NHTSA. What we don't know is why the tires fail. We are working on that and so is Firestone. But it is important to note that once we found out which tires were bad and which were good, we took action. We did not wait to find the cause of the problem before taking action. Thus far, we have replaced about 1.5 million tires -- about 22 percent of the total population of affected tires -- and we are working with other tire manufacturers to speed up the availability and replacement timing. There have been several other stories in the press that I would like to address. On Venezuela: Three and a half months ago, we asked Firestone to replace tires in Venezuela. When they didn't act, we did. We are replacing all the Firestone tires on Ford Explorers and certain light trucks. Today we understand that a Venezuelan government official is asking Firestone to formally recall those suspect tires on Ford and other manufacturers' vehicles. We agree with that action. It's been reported that this official has accused Ford Venezuela of lying. We did not lie to the Venezuelan government. Where there is confusion, we will continue to meet with the government to clear up any misunderstandings. On Saudi Arabia: This problem first began to appear in Saudi Arabia. About a year ago, we asked Firestone to replace the tires on about 7,000 of our products. They wouldn't act, so we did. We replaced the tires. The bottom line is that through all this, we didn't hide anything, and we actively looked to see if there was evidence of the same problem in the U.S. In every case, we were ahead of Firestone and ahead of government action. On Florida: It's been reported that a representative of the Florida Attorney General's office will seek information about the tire issue from us and Firestone. My only response is that as soon as we receive the request, we will give them all the information we have. Prior to next week's hearings, we will make available to the public and to the Congressional committee the documents that will detail what we knew, when we knew it and what we did about it. I want you to know that I am sorry that these defective tires are on our vehicles, and I am depressed by the resultant anxiety, injuries and deaths. Our mission remains to replace bad tires with good tires as quickly as possible. It's as simple and as complex as that. There has been another, unrelated item in the news concerning a California class action lawsuit relating to an ignition component called a Thick Film Ignition module. The issue in the case is whether some of our vehicles from 1983 to 1995 should have had the ignition component mounted in another location on the engine. All government data -- 18 years' worth -- prove that our vehicles are as safe or safer than other vehicles, and NHTSA investigations of this matter found no safety defect. The judge in California criticized us for responses made to NHTSA 13 years ago. It's true that we and NHTSA disagreed about what was being asked for back then, but we have since worked out our differences with NHTSA. We strive to be open and honest with federal regulators. From a legal standpoint, the judge has issued the ruling on a preliminary basis, and we will appeal, and we expect to prevail. EX-99.2 3 0003.txt EXHIBIT 99.2 Exhibit 99.2 STATEMENT OF JAC NASSER CHIEF EXECUTIVE OFFICER FORD MOTOR COMPANY SEPTEMBER 6, 2000 Prepared for Delivery Embargoed Until Commencement of Testimony 1 Good afternoon, Chairman Tauzin, Chairman Upton, and Members of the Committee. I appreciate the opportunity to be here. This has been a complicated and sad situation and we have all been very concerned. Before I discuss the Firestone recall, I would like to say a word about our company. Ford has a distinguished heritage and a bright future - it is an American icon. The strength of Ford has always been its employees and loyal customers. Thirty-two years ago, I joined Ford Australia as a trainee. I never dreamed that someday I would lead Ford Motor Company and represent the Ford team. I am here because I know that you and the public have questions about the tire recall. I am here to answer those questions, and I will remain here until you are satisfied. Now, let's get to the heart of the issue. When did Ford know that there was a problem with the Firestone tires? What have we done about it? And, what are we going to do in the future? First, when did Ford know there was problem with the Firestone tires. --------------------------------------------------------------------- I have said this before, Mr. Chairman, but its worth repeating: Because tires are the only component of a vehicle that are separately warranted, Ford did not know that there was a defect with the recalled tires until we virtually pried the claims data from Firestone's hands and analyzed it. It was only then - -- a few days before the recall was announced -- that Ford engineers discovered conclusive evidence that the tires were defective. We then demanded that Firestone pull the tires from the road. Looking back, the first signs of a problem developed in Saudi Arabia when our dealers reported the complaints. We immediately asked Firestone to investigate. Firestone did so and concluded that the tread separations were caused by improper maintenance and road hazards unique to that environment. We were still troubled. We then asked Firestone to conduct all sorts of tests on the tires. After each and every test, Firestone reported that there was no evidence of a defect. This did not satisfy our Saudi customers. So about a year ago, Ford replaced the Firestone tires. 2 At the same time, we wanted to know if our U.S. customers were having tire problems. In early 1999, we asked Firestone to review its data and we were assured that there was no problem in this country. Our data, as well as government safety data, didn't show anything either. We still felt we should do more and asked Firestone for one more evaluation of tires in Texas, Nevada and Arizona. Firestone reported back, as before, that there was no defect. My purpose is not to finger point, but simply to tell you that at each step Ford actively took the initiative to uncover this tire problem and find a solution. But, it was not until we saw Firestone's confidential claims data that it became clear what needed to be done. If I have one regret, it is that we did not ask Firestone the right questions sooner. What have we done so far. ------------------------- We started by insisting that Firestone recall the bad tires. I then made a commitment to our customers that Ford would dedicate all of its resources to support the Firestone recall. In just three weeks, 1.7 million tires have been replaced. We also worked closely with the rest of the global tire industry to increase tire availability, and I suspended production at three of Ford's plants to free up more replacement tires. We are striving to replace bad tires with good tires as quickly as possible. Looking Forward, What Are We Going To Do ---------------------------------------- Mr. Chairman, there are almost 3 million Goodyear tires on Ford Explorers that have not had a tread separation problem. So we know that this is a Firestone tire issue. However, we all must prevent this from ever happening again. Today, I am announcing that Ford will implement two new reforms that we feel are critical. o First, we will work with the tire industry to implement an "early warning system" to detect the first signs of tire defects on vehicles already on the road. This early warning system must use comprehensive real world data that - we now know -- is so critical to spotting defect patterns. 3 o Second, because our products are increasingly sold around the world, we will advise US safety authorities of safety actions taken in overseas markets, and vice versa. From now on, when we know it, so will the world. - - - - - - - - - - - I have received hundreds of letters from Ford owners and I have spoken personally with many of them. And, believe me, some of those conversations have been difficult. I want you and all the Ford owners to know that we at Ford will not rest until every bad tire is replaced. And I will do everything in my power as President of Ford Motor Company to maintain the confidence and trust of our customers. Thank you, and I would be pleased to answer your questions. 4 -----END PRIVACY-ENHANCED MESSAGE-----