The Decision Made by Ford About the Production
The decision made by Ford to carry on with the production of the ‘Ford-Explorer’ also known as a Sports Utility Vehicle (SUV) was grounded on the returns generated for the firm through the sale of SUVs. The firm’s market demand for SUVs had increased across the globe. Thus, considering the improved market demand for the new SUV, Ford wanted a faster and cheaper way to produce the commodity.
However, such decisions to continue with the production of the SUV despite being unstable were mainly based on the aspect of time-saving as well as meeting the targeted production capacities to satiate the market demand. Ford knew that delayed production of the SUV would give leeway for market competition (Brooks & Dun, 2009).
The trial of the Explorer in service delivery indicated that it did not have solidity, and the only better way of improving it included extending the wheelbase and reducing the Center of Gravity (COG). The changes would have practically consumed more time while hindering the anticipated duration within which the production of the vehicle would have been finished and released for sale.
The market demand target was met, but with negative impacts including rollovers and tire letdown protests. Such incidents showed that the new SUV was unstable though the firm had its own interests and goals to be achieved within a given period (Boatright, 2013).
Cost reduction was also a major factor considered when Ford opted to continue with the production of SUVs. As a basis of its foundation, Ford Motor Company officials asserted that the low-price manufacturing strategy should be maintained during the production of all vehicles including the new SUV.
The firm wanted to incur fewer expenses in the whole production process despite any imminent danger. The budget for extending the wheelbase and reducing the COG of the vehicle was high when making the ‘Explorer’ (Brooks & Dun, 2009).
Lesson Learned in Firestone From the Ford/Goodyear Schism
Ford and Goodyear corporations were long-time production partners. The breakup between these two renowned corporations that took place four years prior to Firestone signing a binding contract with Ford should have sent warning signals to any other corporation. However, obtaining crucial business information is deemed difficult given that most businesses fear market competition.
Despite this fact, Firestone should have requested for the details and trading information with the previous tire supplier. Investigating the annual reports and any business dealings could have revealed the cause of the schism between Ford and Goodyear before entering into a contract. In fact, any form of detest from the Goodyear Corporation meant to address safety and quality issues should have been a warning to Firestone (Boatright, 2013).
Conversely, having dominated global markets, there were numerous tragic accident reports from drivers of Ford vehicles all over. Firestone should have taken the initiative to find out the causes of the road menace that occurred when Ford and Goodyear were still business partners. Any investigation that landed Ford at fault should have been treated with the utmost concern.
For instance, any issues proposed by Ford on cost reduction while compromising the quality and safety should have been checked carefully. In case the schism was due to a price war, then Firestone should have sidestepped the contract. The drawback by Ford could have been a good sign to give Firestone a hunch why Goodyear (the former supplier) and Ford disagreed after a short period of partnership (Brooks & Dun, 2009).
Firestone ought to have enquired about Ford’s former supplier to find out if there had been recorded damages caused by the tires. As it is, Ford went for cheap products and never gave the suppliers the opportunity to identify better tires to use in their vehicles. In fact, this explains why they demanded what they thought would serve the “purpose” from Firestone.
Thus, Firestone ought to have insisted on recommending which tires Ford was to use on every vehicle. The fact shows why Goodyear broke up the partnership, as they were not ready to supply quality products at an unworthy price for low-quality products demanded by Ford.
Understanding the Statment of Ford About the Problem in a Tire Issue
Previous data released by Ford’s Chief Executive Officer (CEO) indicated that various tires supplied by Goodyear Corporation and used on the Explorers proved to be very efficient and were included in the quality and safety lead reports. The Ford Company representatives defended the firm saying that the rollovers had nothing to do with their automobiles. However, Firestone wheels were the problem.
For instance, when the Explorers had been produced, Ford ordered the wheels P235 ATX. These tires were found to be imperfect. Hence, Ford chose to use a set of Firestone tires P245 ATX, which they already had in store (Boatright, 2013).
From reports, tires supplied by Firestone were inclined to split up. The fact puts the blame on Firestone given that Ford conveyed the issue hoping for an alternative, but got assurance from the firm that the split-up was hardly a problem to Ford’s automobiles.
In addition, the widespread accident information acknowledged by NHTSA, which called for a probe, showed that most of the road carnage was due to Firestone Corporation’s tire letdowns while vehicles were fast-moving on freeways.
References
Boatright, J. (2013). Ethics and the conduct of business. Upper Saddle River, New Jersey: Pearson Prentice Hall.
Brooks, L. & Dun, P. (2009). Business and professional ethics for directors, executives & accountants. Boston, Massachusetts: Cengage Learning.