Firestone/Ford Controversy

Firestone/Ford Controversy

In September of 2000, Ford announced that their 2002 Explorers would feature Michelin tires instead of Firestone. However, Ford would provide customers with Firestone tires upon request. Not only was Firestone dropped by Ford, but by a number of other dealers as well. The situation becomes even more problematic when you take into account the amount of specialized assets and competencies that were put in place between Firestone and Ford (and other dealers) and are now lost. These specialized assets and competencies include anything that Firestone did differently from their normal operations in order to make their tires more compatible with Ford’s Explorer, as well as everything else Ford or Firestone did to make to make the business relationship more efficient.

When Ford decided to cut ties with Firestone all of the capabilities that were developed between the two companies over their long history were lost, which is obviously harmful to both companies. According to Kumar’s article, building business relationships around trust can be a competitive advantage within itself. It takes time for trust to be established, and by switching companies this trust is reset. For these reasons, it would be worthwhile for Ford to reconsider their relationship with Firestone because breaking off the relationship might have been a mistake. If Ford would’ve been supportive of Firestone not only would they still have the developed efficiencies of working together for such a long period of time, but it also would’ve built trust with Firestone. If someday Ford goes through a hardship, Firestone will be less likely to abandon them.

There are several factors that Ford should’ve taken into consideration before replacing Firestone as their primary tire supplier. First off, Ford’s image also took a hit with the recall, and simply changing their tire supplier will not completely fix the problem because the argument can be made that the problem was...