Copyright 2000 The Washington Post
The Washington
Post
September 6, 2000, Wednesday, Final Edition
SECTION: FINANCIAL; Pg. E01
LENGTH: 1162 words
HEADLINE: A
Cash Cow on the Firing Line; Tire Issue Threatens Top-Selling Ford Explorer
BYLINE: Frank Swoboda, Washington Post Staff Writers
BODY:
From the beginning, the Explorer has
been a winner for Ford.
Introduced on March 15, 1990, as a 1991 model,
the Explorer quickly became one of the most popular sport-utility vehicles sold
in America and a cash cow for the Ford Motor Co.
But in the weeks since
Bridgestone/Firestone Inc. announced a recall of 6.5 million tires--most of
which were used as original equipment on Ford Explorers and pickup
trucks--customers have begun to turn against both companies, surveys show.
So the stakes are enormous for Ford President Jacques Nasser as he heads
to Capitol Hill today to convince Congress and the American public that the
Explorer's design did not contribute to scores of deadly accidents linked to
Firestone tires.
"This is a tire issue, not a vehicle issue," Nasser
said at news conference last week, summing up Ford's position on the accidents,
which have resulted in more than 100 deaths in the United States and abroad.
Nasser will be testifying as a new survey of 2,800 prospective SUV
buyers by CNW Marketing/Research of Bandon, Ore., shows that Ford's approval
rating for its handling of the tire recall dropped from 70.3 percent on Aug. 15
to 17 percent by Aug. 31.
The survey also showed the number of people
walking into Ford dealer showrooms to take a look at the new cars and trucks
dropped dramatically after the recall. Before the recall, floor traffic in Ford
showrooms was 12 percent higher than the industry average, largely because of
the Explorer and other light trucks. By Aug. 25, that traffic was running six to
nine points below the average.
Even more disturbing to Ford executives
is that an estimated 27.6 percent of prospective SUV shoppers who ranked the
Explorer first or second on their list before Aug. 9 had moved it to third or
fourth by the end of the month.
All this makes Ford officials very
nervous. Because of the Explorer, the nation's top-selling SUV by far, Ford
dominates the highly lucrative U.S. light-truck market, in which the profit on
the sale of a single vehicle averages $ 10,000.
Moreover, much of the
company's light-truck future depends on the success of Explorer derivatives,
such as the new Explorer Sport Trac and the Explorer Sport. And Ford already has
begun beating the drums for its "all new" 2002 Explorer, which will go into
production early next year.
With so much riding on the Explorer, Nasser
has agreed to appear before a congressional committee to defend his
bread-and-butter vehicle and the company's handling of the tire recall.
Ford created the Explorer by grafting a large station-wagon body onto
the frame of a compact four-wheel-drive Ranger pickup truck--essentially gilding
a frog to create the new standard for the nation's auto buyers. It was not the
first SUV, but the Explorer, with its car-like qualities, did help redefine the
market.
A decade later, light trucks--which include sport-utility
vehicles, minivans and pickup trucks--account for half of U.S. passenger-vehicle
production. And Ford has begun the 21st century with a U.S. market share in the
light-truck category greater than that of all the Japanese automakers combined
and 10 points ahead of General Motors Corp., its nearest U.S. competitor.
When the Explorer was introduced, Thomas J. Wagner, then general manager
of the Ford Division of Ford Motor Co., said the new truck was "blurring the
traditional distinctions between cars and trucks."
"Explorer looks more
truck-like than car-like, yet it offers some of the same comforts you would
expect to find in cars," Wagner said.
By making a truck out of a car,
Ford didn't have to worry about stricter federal safety and
fuel-efficiency standards for cars. Under federal law, the
overall fleet of passenger cars produced by a manufacturer must average 27.5
miles per gallon. The average for trucks is 20.7 miles per gallon. And for
years, SUVs and minivans were not required to have such safety features as
side-impact barriers, front-seat head restraints or driver-side air bags.
In the years since the Explorer was introduced, Ford and other
automakers have seen SUV profit margins soar, forming the financial foundation
of today's American auto industry.
But an increasing number of industry
critics have begun to point to suspension problems with the Explorer as a
possible contributing factor in the crashes involving Firestone tire failures.
These critics question whether Ford has gone too far in making a truck
ride like a car, softening the vehicle suspension and reducing the recommended
inflation rate of certain Firestone tires to the point where, under the wrong
conditions, the tread is more like to separate from the rest of the tire.
The 2002 Explorer will be even more "car-like" than its predecessors,
meaning that it will use an independent rear suspension to smooth out the ride.
Independent rear suspensions allow rear wheels to react individually to road
irregularities, producing a ride with less bumpety-bump than that of vehicles
with solid rear axles.
In Venezuela, government officials have blamed
the deaths of 47 people in tire-related accidents to what they have called a
"lethal combination" of Ford design and Firestone manufacturing problems.
Specifically, government investigators targeted the soft suspension on Ford
Explorers as part of the problem.
The Venezuelan accidents were caused
"by a macabre combination between a suspension that is set too soft and tires
that are not appropriate for the Explorer," said Samuel Ruh Rios, president of
the country's consumer-protection agency.
Ford has denied those
allegations as well as government claims that the two companies conspired to
cover up the tire and design problems. But Venezuelan officials point to the
fact that when Ford replaced the Firestone tires for its customers, it also
offered to install stiffer shock absorbers on the Explorers, which would give
the vehicles a harsher ride and greater stability.
Ford insists the two
had nothing to do with each other and the timing of the shock-absorber offer and
the tire replacement was purely coincidental.
Ford officials have put
the blame squarely on the Firestone tires by asserting that Explorers equipped
with tires made by other companies did not experience similar tread-separation
problems.
Nasser said he initially declined to appear at the
congressional hearing because he expected it to focus on the technical issues of
the recall.
He changed his mind last week, however, saying that "it's
very clear now that it's a broader issue than that."
Riding High
Since Ford introduced the Explorer in 1990, it has been a sales winner.
. .
U.S. sales by calendar year, in thousands
(This chart was
not available)
. . . and last year it was the top-selling SUV by
far.
1999 U.S. sales
Ford Explorer 428,772
Jeep
Grand Cherokee 300,031
Ford Expedition 233,125
Chevy Blazer
232,140
SOURCE: Ford Motor Co.
GRAPHIC: Chart, The Washington Post
LOAD-DATE: September 06, 2000
