SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report August 9, 2000
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(Date of earliest event reported)
FORD MOTOR COMPANY
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-3950 38-0549190
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(Commission File Number) (IRS Employer Identification No.)
One American Road, Dearborn, Michigan 48126
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 313-322-3000
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Item 5. Other Events.
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On August 9, 2000, Bridgestone/Firestone, Inc. ("Firestone") announced a
recall of all Firestone Radial ATX and Radial ATX II tires in size P235/75R15
produced in North America since 1991 and all Wilderness AT tires of that same
size manufactured at Firestone's Decatur, IL plant. At the time the recall was
announced, Firestone estimated that about 6.5 million of the affected tires were
still in service. The recall was announced following an analysis by Ford and
Firestone that determined there was a statistically significant incidence of
tread separation occurring in the affected tires. Most of the affected tires
were installed as original equipment on our Explorer, Mountaineer and Ranger
models and on Mazda's Navajo and B Series models (which are manufactured by Ford
and sold to Mazda). Under the recall, owners and lessees of those and any other
Ford or Mazda vehicles with the affected tires are being asked to bring their
vehicles to a Ford, Mazda or Firestone dealer for free replacement tires.
Alternatively, customers can have the tires replaced at other tire dealers with
tires of another manufacturer and be reimbursed up to $100 per affected tire.
Because of the magnitude of the recall and the limited supply of appropriately
sized replacement tires from all tire manufacturers, we expect the recall to
take several months to complete. As of September 6, 2000, we estimate that about
30% of the estimated 6.5 million affected tires have been replaced.
We have preliminarily agreed to bear a portion of the costs of Firestone's
recall. In addition, we have suspended production of Explorer, Mountaineer,
Ranger and B Series models for the two-week period beginning August 28, 2000,
which will allow us to divert about 70,000 replacement tires for use in the
recall. Although we expect these actions to reduce revenues and increase costs,
it is too early to assess their overall financial impact in the second half of
2000.
At this point, neither Ford nor Firestone has determined the root cause of
any defect in the affected tires. The National Highway Traffic Safety
Administration ("NHTSA") is investigating this matter and could conclude that
the recall should be expanded to include other Firestone tires. On September 1,
2000, NHTSA released a Consumer Advisory, suggesting the scope of the recall
could be expanded and recommending that owners of vehicles with certain models
and sizes of Firestone tires not already being recalled take a number of actions
to enhance their safety. Additionally, Congressional hearings on this matter
began on September 6, 2000, at which Ford's Chief Executive Officer, Jac Nasser,
has testified.
In addition, governmental authorities in Venezuela are conducting an
investigation relating to accidents involving Explorers equipped with Firestone
tires. Ford of Venezuela launched an Owner Notification Program ("ONP") in May
2000 to customers with Explorers equipped with Firestone tires. The ONP included
tires produced both in Venezuela and in North America. We have found that many
of these recalled tires were not built to our specifications. An agency of the
Venezuelan government, INDECU, has recommended an investigation to determine
whether possible criminal charges should be brought against both Ford and
Firestone. INDECU has also indicated its intention to pursue a civil case
against Ford of Venezuela to seek monetary compensation for victims of tread
separation accidents, civil penalties, and a recall of all 1996 - 1999 Explorers
to retrofit them with stiffer shock absorbers.
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On September 5, 2000, Firestone announced its own recall of the same tires
already covered by Ford of Venezuela's ONP.
As a result of the Firestone tire recall, there have been several new
individual personal injury lawsuits and class action lawsuits filed against Ford
and Firestone in state and federal courts across the country. Although the
number of new filings increases almost daily, there are approximately 63
personal injury lawsuits and 35 class action lawsuits pending against Ford.
Among other things, the class actions seek to expand the scope of the recall to
include other tires and to award to consumers the cost of replacing those tires.
Several of the individual personal injury lawsuits and class actions also seek
punitive damages.
Mr. Nasser's statement made at an August 31, 2000 press conference and his
statement made at the September 6, 2000 hearing before a joint session of the
House Subcommittees on Consumer Protection and Government Oversight, filed as
Exhibits 99.1 and 99.2, respectively, to this report, are incorporated by
reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
EXHIBITS
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Designation Description Method of Filing
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Exhibit 99.1 Press Conference Statement Filed with this Report
Dated August 31, 2000
Exhibit 99.2 Hearing Statement Filed with this Report
Dated September 6, 2000
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on the date indicated.
FORD MOTOR COMPANY
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(Registrant)
Date: September 8, 2000 By: /s/Kathryn S. Lamping
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Kathryn S. Lamping
Assistant Secretary
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EXHIBIT INDEX
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Designation Description
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Exhibit 99.1 Press Conference Statement
Dated August 31, 2000
Exhibit 99.2 Hearing Statement
Dated September 6, 2000
