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Saturday, March 24, 2007

Brand PR Failures: Firestone tyres

The success of many brands is determined by the right partnership. This is certainly the case where one product is dependent on another. For instance, software developers and computer manufacturers need each other, and can often achieve better results if they join forces. Similarly, if you produce tyres you need to build and sustain good relations with a car company.

Any tyre manufacturer who can boast Ford Motor Company as a customer is therefore at a significant advantage. Equally, to lose such a customer could be viewed as disastrous and something which should be prevented at all costs, especially if you have been working together for almost a century. And yet on 21st May 2001, US tyre company Firestone announced that it would no longer supply Ford with original equipment tyres in either North or South America. Although Firestone was still prepared to work with Ford in Europe and Asia, this accounts for a meagre 25 per cent of its turnover with Ford.

Even though three-quarters of tyres sold are ‘aftermarket sales’, a significant number of Ford customers replace their tyres with the same brand.

To appreciate the true significance of this wilful departure it is necessary to understand the two company’s shared history. The relationship between Ford and Firestone certainly goes back a long way – to 1908 in fact, the year Harvey Firestone first supplied tyres to Henry Ford for the Model T.

Although the two men had their disagreements, the Ford Motor Company used more of Firestone’s tyres than any other brand, and the relationship survived long after the founders’ deaths.

Even when the Japanese tyre company Bridgestone purchased Firestone in 1988, Ford continued to be its number one customer. In the 1990s, Ford was buying about 40 per cent of its tyres from Firestone, far more than from any other manufacturer.

However, Firestone has suffered more than any of its competitors from a number of high profile tyre failures. In 1977, the US government forced a recall of around 14 million tyres after 41 deaths and even more injuries were apparently caused by blowouts of the Firestone ‘500’ tyres. Following all the negative PR this caused, Firestone lost its number one market position, to rival Goodyear.

Despite a decline in sales, the relationship with Ford was maintained intact.

It was only when the quality of Firestone tyres was again placed under the spotlight in the late 1990s that trouble erupted between the two companies. In 1999, Ford received a number of complaints from customers in Thailand and Saudi Arabia, and ordered a recall of its cars in those regions. The company also asked Firestone to investigate these complaints. After taking six months to conduct the investigation, Firestone declared there was no problem with its tyres.

Now, however, the situation had spread to the United States, where a series of traffic accidents had prompted a Texan TV station to carry out an exposé of the problem. At the same time, the National Highway Traffic Safety Administration (NHTSA) launched an official enquiry in which both Ford and Firestone had to submit evidence.

While Firestone agreed to co-operate with the NHTSA, at first the company refused to supply any information on faulty tyres to Ford. When it eventually did so, Ford immediately subjected the data to heavy scrutiny and showed its findings to the NHTSA. The findings apparently confirmed that the tread of the tyres separated when the car was driven at high speed. Within four days, the NHTSA issued a mandatory recall notice.

Firestone was still determined to fight its corner. When Ford suggested the company publish all the data on its tyres, Firestone refused, maintaining that the main cause of the accidents was the design and specification of the Ford Explorer. Their argument is explained by the editorial team of the Web site:

In order to give a more comfortable ride, Ford had ignored Firestone’s recommendation of tyre pressures in the 30–36 psi range and had recommended pressures at the bottom end of that range. Any neglect by owners had resulted in under-inflated tyres which ran hotter than they should, especially in desert conditions, and if the treads did strip off, the vehicles were more inclined to roll over because they have a higher centre of gravity.

Whether Firestone has a point or not, its brand has been considerably damaged by the very public mud-slinging as both it and Ford tried to dodge the blame for the accidents. It all came to a head when Ford announced it would replace up to 13 million Firestone tyres. Ford explained that, ‘tyres not covered in the original recall could experience increased failure rates.’ This decision came a day after Firestone abandoned Ford as a customer. As the investigations of more than 100 deaths in tyre-related crashes of Ford Explorers continued, Firestone was rapidly losing the public’s confidence.

In one Fortune magazine survey, the company dropped to the bottom of a chart of most-admired companies.

‘Looking at the brand today, I would say it’s a highly challenged brand,’ says Gwen Morrison, a branding analyst at Chicago-based marketing agency Frankel. ‘The very core of what tyre brands have stood for is safety. You see ads with a baby sitting in a stack of tyres; there had been a halo over the entire industry.’

The fact that Ford and Firestone failed to provide clear, consistent and comprehensive information to the public, explaining the crashes, was an obvious mistake. Sure, however they would have been handled, the crashes were always going to be bad news. But by sitting on information and failing to co-operate, Firestone has put its own long-term future under greater threat than it would have been otherwise.
Many branding experts now expect parent company Bridgestone to abandon the Firestone brand altogether, and concentrate on its own branded tyres instead.

Lessons from Firestone

  • Be honest with customers. The tyre failures themselves have probably caused less damage than evidence that Firestone held back information about the problems.
  • Act fast. In the event of a brand crisis, such as a product recall, companies need to act fast to re-establish customer confidence. Waiting six months before publishing your findings is only going to fuel negative speculation.
  • Be sensitive. By squabbling with Ford instead of offering sympathy to the car-crash victims, Firestone appeared insensitive.
  • Cover worst-case scenarios with business partners. Partnerships built for the long term must include mutually agreed-upon responsibilities and communication plans, recommends Robert Desisto, brand analyst at Gartner Research. ‘More specifically, these partnerships must include a method of listening to customer complaints through one another’s customer support centres, as well as a method of sharing technical support data earlier to prevent lost sales as well as the loss of the more intangible customer goodwill,’ he says.
  • Be aware that prediction equals protection. Owing to the fact that customers were complaining about the tyre failures years before the accidents made international headlines, Firestone should have been able to predict the problem and resolve it in advance.
  • Remember that perception is everything. Whatever the truth behind why the tyres split, the poor handling of the issue by Firestone meant that the brand came under fire. If you look as though you are hiding relevant information from the public, the perception will be negative, regardless of the truth.
  • Keep hold of your key brand asset. Firestone’s marketing efforts had always been designed to instil the notion of ‘safety’ into the public’s mind. When it lost this key brand asset through all the hostile publicity, Firestone was in big trouble.


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