Harvey Firestone Rubber Company Case Study - Management Assignment Help

Assignment Task

Task
Harvey Firestone founded the Firestone Tire 8, Rubber Company in 1900 in Akron, Ohio. Firestone's long relationship with Ford Motor Company began 1906, when Henry Ford bought 2,000 sets of tires from Harvey Firestone. Since that initial transaction, both companies have grown and become major players in their industries. Firestone, now part of Bridgestone Americas, supplies tires for passenger vehicles, light trucks, commercial vehicles, off road vehicles, motorcycles, and agricultural vehicles. Ford is a global auto manufacturer and owns many well-known automotive brands including Ford, Mercury, Lincoln, and Volvo. Firestone, despite growth over the past century, has faced more turbulence than Ford. In 1978, Firestone recalled 14.5 million tires—the largest tire recall in history— because the excess application of the adhesive that binds the rubber and steel had caused 500 tread separations and blowouts. Firestone paid a 5500,000 fine for concealing safety problems. This recall weakened the financial position of the company and resulted in the merger with Bridgestone USA, Inc., a subsidiary of Tokyo-based Bridgestone Corporation in 1990 for $2.6 billion. Bridgestone successfully restored the struggling company back to profitability, but Firestone's tire recall problems were not over. Recalls have been a major issue for the tire industry. In 1980, Uniroyal recalled almost 2 million tires because of tread separation. B.F. Goodrich recalled 1 million tires in 1974 because of improper inflation and installation. Kelly-Springfield faced a recall in 1976 when 300,000 tires were recalled because of tread separation. General Tire recalled 187,000 tires on in 1979 because of exposed belt wire. Cooper Tire & Rubber recalled more than 156,000 tires in 1988, because of bead flaw. In 1998 Kelly-Springfield recalled more than 500,000 tires because of sidewall cracking. The number of recalls indicates that tire failures have been an industry-wide problem for more than 25 years. 
 

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