Ford's Jac in the box

Ford has suffered another embarrassing setback, writes ALASTAIR SLOANE.

Ford New Zealand has invited owners of Ford Explorers equipped with Firestone Wilderness AT tyres to have the tyres replaced free.

The offer comes after Ford in the United States recalled 13 million of the tyres last week, saying it had lost confidence in the ability of Firestone tyres to keep Ford customers safe.

The latest recall comes nine months after Firestone recalled 6.5 million AT and ATX Wilderness tyres following tread and other failures, mostly affecting Ford Explorers. Ford then stopped putting the tyres on its Explorers. At least 174 people have been killed and more than 700 injured in the United States in accidents involving the Firestone tyres.

The recall also came after Ford executives explained their fears to federal regulators, a meeting which prompted Firestone chief executive John Lampe to end its 100-year business history with Ford.

Nigel Harris, the managing director of Ford New Zealand, said the replacement programme was purely a pro-active move on the part of Ford.

"We have not had any tread separation issue with Firestone Wilderness tyres in New Zealand," he said. Nearly 2000 4WD Ford Explorers have been sold here since the vehicle's launch in 1996.

Ford launched a public relations offensive to explain the $5 billion recall. It took out fullpage advertisements in newspapers in the United States, saying the Wilderness AT tyres perform better than the tyres that were recalled last year, but could experience increased failure rates in the future.

"Customer safety always has been - and always will be - our No 1 priority," the ads concluded, followed by the signatures of chairman Bill Ford and chief executive Jac Nasser.

But the ads did not address any of the claims Firestone has made questioning the safety of the Explorer, the most popular sport utility vehicle in the world. Firestone said the Explorer suffers an unusual number of tyre failures and has a high rate of rollover in crashes, and claimed Ford was ignoring the issue.

Nasser disputed Firestone's charges, saying the tyremaker drew inaccurate conclusions. He also said federal data showed that the Explorer was less likely to roll if one of its tyres lost its tread than similar vehicles from other carmakers.

"If you happen to be in a vehicle that had a tread separation, and that vehicle happens to be a compact SUV, you'd be much safer in an Explorer," Nasser said. "If those Firestone tyres were on other SUVs, the rollover instance would be much worse."

A letter from Lampe to Nasser, ending their companies' business history, said in part ...

"Our analysis suggests that there are significant safety issues with a substantial segment of Ford Explorers. We have made your staff aware of our concerns. They have steadfastly refused to acknowledge these issues.

"We have always said that in order to ensure the safety of the driving public, it is crucial that there be a true sharing of information concerning the vehicle as well as the tyres. You are simply not willing to do that.

"We believe you are attempting to divert scrutiny of your vehicle by casting doubt on the quality of Firestone tyres. These tyres are safe and, as we have said before, when we have a problem we will acknowledge the problem and fix it. We expect you to do the same ... "

But the tyre recall isn't the only problem facing the Explorer. Sales in the United States fell nearly 16 per cent in April, when the new model hit the market. The overall segment was down almost 19 per cent.

The Explorer is crucial to Ford. It has been the company's cash cow, generating nearly 11 per cent of all Ford sales in the United States. Explorer profits fuel North American earnings, offsetting hard times in other countries.

It has been described as "close to being the most important profit contributor of all Ford product lines in the world."

Historically, the Explorer has sold around 430,000 units in the United States each year. The Jeep Grand Cherokee is always No 2 at around 300,000 units. The Chevrolet Blazer is third in the 230,000 range.

Ford is writing to customers about the recall. It wants to first focus on those with the oldest tyres in warm-weather southern states.

Heat is a known factor in the tyre failures and most of the complaints about Firestone tyres have come from those states, and about half took place in June, July and August, the northern summer.

The new Ford Explorer wasn't on the market more than a couple of weeks when it suffered its first equipment recall. Then last week it had its second, affecting 50,000 Explorers built at Ford's plant in Louisville, Kentucky.

Ford said an assembly line conveyor belt that was too narrow for the wider 2002 model may have cut the tyre tread. When the vehicles were loaded too far to the right on the conveyor belt, it left cuts 12cm to 22cm long and 1cm deep in one or both of the right tyre treads.

Ford described the cuts as cosmetic and said they did not affect tyre performance. The tyres involved were Goodyear and Michelin brands - not Firestones.

But analysts said the second recall was an embarrassing setback for Ford, especially after it had spent months scouring new Explorers for any defects before putting them on sale, hoping to move beyond last year's tyre recall and avoid repeats of recent, recall-troubled launches of the Focus and Escape.