Tire Company Firestone Bridgestone example essay topic

Policy Analysis Bridgestone-Firestone Tire Recall and its Aftermath Introduction This research paper tries to analyse the Firestone tire recall, the TREAD legislation and the Bridgestone-Firestone non market and market strategy. The analysis will be started by introducing the company, its different stakeholders and the main issues will be outlined. Next, a more in depth analysis of the case will be given, using relevant concepts from class. The main points will be summarised in a conclusion.

Bridgestone / Firestone Inc., a subsidiary of Bridgestone Corporation, is formed in 1990 when Bridgestone U.S.A. merged with The Firestone Tire & Rubber Company. Bridgestone / Firestone is best known for it's production of tires, which account for more than 75 percent of its annual revenues. Sales of the company amount to $7.6 billion in 2002. In August 2000, when problems with Firestone Tires and Ford Explorers led to about 270 deaths, Firestone had to recall 6.5 million tires. This recall had an impact on both market and non-market components. The 4 I's Using the concept of 'the 4 I's', I will frame the case and the different stakeholders.

The main issues in this case are safety, liability, the recall and the TREAD act (The Transportation Recall Enhancement, Accountability and Documentation act). Interests include the tire company Firestone / Bridgestone (and in general the Rubber Manufacturers Association), Ford (as manufacturer of the SUV 'explorer') and consumers (represented by groups as Public Citizen and Strategic Safety). The institutions involved are the regulatory agency NHTSA (National Highway Traffic Safety Administration), the different courts, Congress and State legislators and the News media (nongovernmental). A last 'I' is Information.

Information refers to what interest and institutional officeholders know about the issues, the consequences of alternative courses of action, and the preferences of those concerned with an issue. In this case information plays an important role. The (lack of) information of the consumers and the NHTSA, and later the obligation to give information is at the heart of this case. Public Interest Theory vs. Pluralist Theories An interesting approach to understanding political activity in is to look at the Public Interest Theory vs. Pluralist Theories.

There is not much evidence to be found that political action in this case (the TREAD act) is a result of serving the public interest in an independent way, applying a set of normative principles. On the contrary, the industry and the public interest groups worked together with the NHTSA. "Mr. Shea said, the industry was able to work with Congress to obtain the fairest, least onerous bill it could under the circumstances". (Moore). Not only the tire industry, but also the public interest groups had a stake in the new legislation (Power). .".. and we have been working with them as we have been working with other elements of the motor vehicle industry in terms of developing a rule that is not overly burdensome and yet will provide good data to us, said Kenneth Weinstein, NHTSA associate administrator for enforcement". (Moore).

These extracts indicate that this new regulation is a result of the actions of the different interest groups and not a result of a general consensus. By applying the Wilson-Lowi Matrix to this case, the position of these interest groups will be analysed. Wilson-Lowi Matrix Wilson categorized the nature of political competition on an issue as a function of the concentration or dispersion of the benefits and costs resulting from an alternative. The TREAD act will cost the Tire industry a lot of money (Moore) and the costs are clearly concentrated. Benefits can be described as the reduction of the safety risks for consumers.

The consumers benefit from the TREAD act, but these benefits seem to be dispersed. The tire failure rates are very low, even in the Firestone case (estimated at 15 per million on the last recall (Ferrel) ), so the general risk per capita is small. The Wilson-Lowi matrix predicts in this case that political competition should be characterized as Entrepreneurial Politics. According to Wilson, a political entrepreneur is needed to mobilize the interests with widely distributed benefits.

Indeed, this role is fulfilled by Public Citizen and Strategic safety. These highly influential consumer interest groups were already in existence long before the Firestone tire problems, so one can argue that the competition between the different interests also leans to Interest Group Competition, although the (economic) benefits are widely distributed. The strong presence of consumer interest groups, even before this specific case, can be explained by the fact that, even though the economic benefits per capita may be small, the psychological effect of 'feeling unsafe in your own car' is significant and people encounter this tire safety issue in their day to day life. The attention of people for safety issues that affect them in their day to day life is always bigger. This can explain the strong presence of these consumer safety interest groups.

Theory of Media Coverage & Treatment As information plays an important role in this case, attention should be paid to the Media coverage of this topic. In 'Theory of Media Coverage & Treatment', the treatment of an issue is a function of intrinsic audience interest and the media's assessment of the societal significance of the issue. As both the societal significance (car safety), as described above, and the audience interest, are high, the model predicts that there will be an extensive coverage and that the coverage may be characterized by Position taking and advocacy. "We went from a business community totally below the radar screen to one that was on the 24-hour news".

(Moore). Almost every major American News channel website has covered this case extensively (USnews, CNN, Fox News, ABC, ... ). The enormous attention many law firms paid to this subject can also be considered as coverage (web web web).

Although the information provided by these law firms is often one-sided, they are an important element in the coverage of this case. The media also took the opportunity to report the story using personal tales of tragedy and photographs of crashed vehicles. They also worked closely together with researchers. Partly because of that, Firestone was not able to control the stream of facts. The way Firestone / Bridgestone tried to settle this case and the way they communicated undoubtedly prolonged the media attention. "Those familiar with the situation say the giant public-relations firm (Fleishman) grew disturbed with Firestone's refusal to communicate the breadth and seriousness of its problems."Firestone didn't follow most of Fleishman's advise...

". (Kranshold). Bridgestone / Firestone was inaccessible to reporters and appeared to take a defensive posture. It was only on September 12th 2000 that Bridgestone / Firestone admitted that they made bad tires (Ansberry). This refusal of Firestone to provide the necessary information and the late recall raised the necessity of a TREAD act. Moreover, despite the media attention, the NHTSA gave a slow response as well (Ferrel).

Policy window analysis A lot of elements that can explain why the TREAD act passed have already been mentioned. A policy window analysis can be used to bring some of these elements together. The TREAD act passed in the Fall of 2000. "It is also one of the most expedited bills in recent history, racing through the House and Senate in the fall of 2000, only a few short weeks after the House and Senate Commerce Committees began hearings on the controversy involving Ford Motor Co.'s Explorer vehicles and the recall of Bridgestone / Firestone-made Firestone light truck tires".

(Moore). "The TREAD act is one of the most sweeping pieces of tire and auto safety legislation ever passed secondly to the original highway Safety Act of 1966". (Moore). The fact that the Highway safety regulations were changed only a few weeks after the House and Senate hearings, and the fact that these were the first changes in more than 30 years indicate that the Firestone tire recall can be considered as a policy window. An opportunity had been giving to the consumer safety groups to advance the issue of safety regulation.

Their effort, the extensive media coverage, the public interest for car safety and the originally slow response of the NHTSA are elements that help explaining why the TREAD act passed. Summary A lot of elements have been taken into account in this analysis. The importance of the different interest groups and the media coverage has been mentioned. The position of the Firestone Company itself and their influence on the outcome has been analysed. Their refusal to admit the problems, the fact that the Company did not give appropriate information and did not communicate with all the stakeholders has made the case more complex and has increased the need for a TREAD act. Finally evidence can be found that all these elements created a policy window for regulation change.

Bibliography

Appel, T. (2000), "Firestone Milestone Brings on Dilemma", The Wall Street Journal, New York (Augustus 18), p.
B. 8. Anonymous, "The TREAD act Summary", (web) Anonymous (2001), "Firestone Announces Replacement Program, NHTSA Ends Tire Investigation", (October 4), (web) Ansberry, C.
Power, S. (2000), "Bridgestone / Firestone Says It Made 'Bad Tires' ", The Wall Street Journal, New York (September 13), p.
A. 1. Baron, D.P. (2003), Business and its environment, fourth edition, Prentice Hall, p.
2, 5, 16,167 Chappell, L. (2000), "Analysts: Future OK for Firestone", Automotive News, Vol.
75, Num. 5893. p. 46. Ferrel, O., Friedrich, J., Ferrel, L. (2002), Business Ethics: Ethical Decision Making and Cases, Houghton Mifflin Company, (web).
Kranhold, K., White, E. (2000), "The Perils and Potential Rewards of Crisis Management for Firestone", The Wall Street Journal, New York (September 8), pp.
B. 1, B. 4. Moore, M. (2003), "TREAD Act;
Tough act to follow? Big implications for the future of tires, makers", Crain communications, Inc., Tire Business (September 22), p. 42 Power, S. (2000), "Update needed for tire rules, activist argue", The wall street journal (eastern edition), New York (September 8), p.
B. 1. Runge, J. (2002), "Implementation of the TREAD act", (February 28), (web).