The Ford and Firestone’s supplier relationship was more than a business partnership. The two families were intertwined. Ford’s grandson married Firestone’s granddaughter in 1947, and Firestone tires outfitted Ford cars for decades.
However, even family bonds could not keep these two businesses together because of poor quality control and a breakdown of trust in the product, which led to a lot of finger-pointing.
It reached a boiling point on May 21, 2001, when Firestone’s CEO, John Lampe, wrote to Ford CEO Jacques Nasser that “we can no longer supply tires to Ford since the basic foundation of our relationship has been seriously eroded.
The collapse of Ford & Firestone’s supplier relationship was shocking, but it revealed a deep truth that procurement teams worldwide are all too aware of. Poor supplier quality control and a lack of trust can destroy even the strongest supply chain partnerships.
So what exactly happened and how can we learn from it?
How a Century-Old Partnership Broke Down
Ford and Firestone began working together in 1906 when Harvey Firestone first supplied Henry Ford’s Model T tires. That one supply created a partnership that shaped the automotive industry. The relationship lasted nearly 100 years and made both companies icons.
However, that partnership began to crack in the late 1990s when reports of tire failures on Ford’s Explorer SUVs leading to deadly rollovers started surfacing.
In August 2000, Bridgestone/Firestone voluntarily recalled 6.5 million tires (primarily 15″ ATX and Wilderness AT tires on Explorers and other trucks) linked to dozens of deadly rollovers. The recall shook the entire auto industry.
After months of mutual finger-pointing, Firestone ended its partnership with Ford in 2001. But just as that incident had defined partnership in the auto industry for many decades, the fallout also marked a turning point in supplier relationships management across the globe.
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But What Exactly Went Wrong?
Although there was a lot of finger-pointing at the height of the product failures and recalls, investigations showed there was enough blame to go around.
Firestone’s Quality Control Failures
The 1994-1996 labor unrest at Firestone’s Decatur plant in Illinois caused serious problems for the tire company that lingered for years and had ripple effects across its entire tire production and supply chain operations.
High demands and tight deadlines during the strike forced the company to hire replacement workers and push shifts to 12 hours.
However, this meant that quality inspectors became overwhelmed. Factory inspectors fell behind as tires “piled up on the factory floor,” and even old, dried-out rubber was used when original workers returned.
The result was not a surprise. Defective tires piled up.
The plant’s poor conditions and old equipment made things worse. High humidity due to poor air conditioning weakened the glue that held the tires together.
To meet Ford’s request for lighter tires (and improve Explorer fuel economy), Firestone also made design compromises that worsened durability. The company’s engineers thinned the ATX-II tire construction by cutting out material.
This meant the steel belts inside tires separated from the tread during hot weather and with heavy loads. Ultimately, these quality control failures spelled disaster on the road.
Ford’s Design and Pressure Choices
Ford’s vehicle design and specification choices added fuel to the fire. The Explorer had a high center of gravity and a short wheel base, which made the vehicle more likely to roll over. So, to soften the stiff suspension and improve ride, Ford recommended a low tire pressure of 26 psi.
That pressure was too low, well beyond Firestone’s recommended 30 psi. It made the tires heat up and wear out faster, increasing the chance of failures.
No Communication, No Trust
Both companies blamed each other. Firestone said Ford’s SUV design was flawed. Ford said Firestone’s tires were unsafe. Both were right, but neither accepted responsibility. The result? Years of partnership ended with lawsuits, recalls, and anger.
The Impact of Ford and Firestone’s Supplier Relationship Collapse
The recall affected 6.5 million tires, a significant number, especially for the bottom line. Hundreds of people died or were injured in rollovers. And the lawsuits poured in. Firestone paid millions in settlements. Ford’s profits dropped.
Ford spent about $500 million on replacements and repairs. Firestone’s market share collapsed. And the parent company lost almost half its stock value. Ultimately, the Decatur plant closed.
However, it wasn’t all bad news. The quality control problems forced Congress to act fast, establishing the TREAD Act, which forced automakers and tire makers to report defects quickly. Following that, electronic stability systems and tire-pressure monitors became standard.
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How Ford Managed the Crisis
Faced with a safety crisis, Ford took multiple steps to manage the fallout. It started by publicly apologizing to customers and setting up a massive replacement program. It mailed letters to the 2 million affected Explorer owners and offered free replacement tires and installation.
Ford did not hesitate to expand safety measures. As a precaution, in the late 2000s, the company halted production at three assembly plants to divert nearly 70,000 tires for the recall and even announced a recall of 50,000 new vehicles over unrelated minor tire cuts.
On the product side, Ford overhauled the Explorer. For the 2002 model year, the company’s engineering team redesigned the Explorer, making it wider and more stable. This allowed them to increase the recommended tire pressure to 30 psi. It made the vehicle wider and more stable.
Ford changed how it worked with suppliers. No longer would it rely on just one source for critical parts. This made Ford’s supply chain more resilient.
Lessons from Ford & Firestone’s Supplier Relationship Collapse
There are a few lessons from the fall of Ford and Firestone’s century-long relationship:
Lesson 1: Control Quality at Every Step
Poor quality control at Firestone’s plant turned tires into a safety risk. More than ever, supply chains must audit suppliers often. Check equipment, training, and processes. Use simple steps like:
- Use proper working conditions.
- Keep equipment in good shape.
- Inspect materials before production.
Lesson 2: Design and Testing Must Connect
Ford’s Explorer design did not match the Firestone tire’s limits. You and your suppliers must work together from the start. Create an environment where suppliers can test their supplies on the finished product they serve.
If a supplier cannot meet a design need safely, it is important to speak up, and actions must be taken.
Lesson 3: Never Rely on One Supplier
Ford trusted and relied too much on Firestone, so when the problems hit, Ford had no quick options. Supply chains must build a mix of suppliers to protect production and keep quality high.
Lesson 4: Communicate Openly
When trouble came, Ford and Firestone pointed fingers rather than working together. A lack of trust deepened the crisis more than necessary. More companies must prioritize an environment that fosters constant, open communication with suppliers.
Sharing test data and addressing small problems before they grow is important.
Lesson 5: Plan for Crisis
Ford moved fast with recalls and repairs because the company had a well-established crisis plan. This way, the company was able to preserve brand communication, but more importantly, it saved lives.
Always have contingency plans that detail clear steps to protect customers and the business.
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Applying These Principles to African Supply Chains
African manufacturing supply chains need strong supplier relationship management. To do that, the following is a great place to start:
- Set Clear Standards: Write down quality rules for suppliers. Make sure they understand them.
- Build Relationships, Not Just Contracts: Work with suppliers as partners. Share plans and challenges.
- Visit Supplier Plants: Inspect where parts are made. Check that workers have the tools they need.
- Use Multiple Suppliers: Don’t put all your business in one place. Spread risk across several partners.
- Test Early and Often: Try parts under real conditions. Watch for failures. Fix them fast.
- Plan for Emergencies: Have a plan to swap suppliers if one fails. Train staff on crisis response.
Wrap Up
Ford & Firestone’s supplier relationship collapse was a painful lesson. A century of trust disappeared when quality slipped and communication failed. African supply chains can avoid this pain by controlling quality, working together, and sharing data.
When you manage suppliers well, you protect your customers, profits, and brand. Learn from Ford & Firestone’s supplier relationship collapse, and build a strong supply chain, even in tough times.
Obinabo Tochukwu Tabansi is a supply chain digital writer & ghostwriter helping professionals and business owners across Africa explore various strategies that work and learn from the success and failures of various supply chains across the globe. He also ghostwrites social content for logistics & supply chain businesses
