Good morning, Chairman McCain, Senator Hollings, and Members of the Committee. I appreciate this opportunity to update you and the American people on the Firestone tire recall.

Before I discuss the Firestone tire recall, I would like to say a brief word about Ford Motor Company. Throughout our history, our strength has been our employees and our customers.

I have been with Ford for thirty-two years, joining Ford Australia as a trainee. I am honored to represent the Ford Motor Company as it begins a new century of service to its customers.

You and the public have questions regarding the Firestone recall. I am here to answer those questions, and I will remain here until you are satisfied.

Now, let's get right to the heart of the issue.

  • When did Ford know that there was a problem with the Firestone tires?
  • What have we done about it?
  • And, what are we going to do in the future?

    Let's start with: When did Ford know there was problem with the Firestone tires

    Because tires are the only component of our vehicles that are separately warranted, Ford did not know that there was a defect with the tires until we virtually pried the claims data from Firestone's hands and analyzed it ourselves. It was only then -- a few days before the recall was announced -- that Ford engineers discovered conclusive evidence that the tires were defective. We demanded that Firestone pull the tires from the road.

    Looking back, the first signs of a problem developed in Saudi Arabia when our dealers reported complaints about certain Firestone tires. We immediately asked Firestone to investigate. Firestone did so and told us that the tread separations were caused by improper maintenance and road hazards unique to that environment. We weren't convinced.

    So, we asked Firestone to conduct additional tests on the tires. After each and every test, Firestone reported that there was no defect. But, this didn't satisfy our Saudi customers. So Ford replaced the Firestone tires.

    At the same time, we wanted to know if our U.S. customers were having similar tire problems. Early last year, we asked Firestone to review its U.S. data and we were assured by Firestone that there was no problem in this country.

    Our data, and government safety data, didn't show anything, either. Despite this, we asked Firestone for one more test. Firestone examined tires in Texas, Nevada and Arizona and reported back -- as before -- that there was no defect.

    As you know, contrary to those repeated assurances, we later learned a different story from Firestone's confidential claims data. And, when we did, we insisted that Firestone recall the bad tires.

    Although I take no personal or professional pleasure in saying it, Firestone failed to share critical claims data with Ford that might have prompted the recall of these bad tires sooner.

    Last week, I listened in disbelief as senior Firestone executives not only acknowledged that Firestone had analyzed its claims data, but also identified significant patterns of tread separations as early as 1998. Yet, they said nothing to anyone, including Ford Motor Company.

    This is not the candid and frank dialogue that Ford expects in its business relationships. After Firestone's testimony last week, we expressed Ford's profound disappointment to the head of Bridgestone/Firestone in Japan.

    My purpose is not to finger point, but simply to tell you that, at each step, Ford took the initiative to uncover this problem and find a solution.

    If I have one regret, it is that we did not ask Firestone the right questions sooner.

    So - What have we done so far

    As I said, we started by insisting that Firestone recall the bad tires. To encourage - and even prod - Firestone to take immediate action, Ford offered to share the cost of the recall and requested the use of competitors' tires.

    I then made a public commitment to our customers that Ford would dedicate its resources to support the Firestone tire recall. In just four weeks, over 2 million tires have been replaced.

  • We have worked closely with the rest of the global tire industry to increase tire availability.
  • We shut down production at three Ford plants to free up replacement tires that can be sent to our dealers for our customers.
  • And just days ago, I extended that shutdown to free up more replacement tires.

    This is encouraging, but not good enough.

    Now - Looking Forward, What Are We Going To Do

    Mr. Chairman, there are almost 3 million Goodyear tires on Ford Explorers that have not had a tread separation problem.

    Data compiled by the Department of Transportation shows that the Explorer has a safety record second to none -- particularly when you compare it with the average passenger car and competitive sport utility vehicles.

    So, based on these facts, we know that this is a Firestone tire issue -- not a vehicle issue. Regardless, we all must prevent this from ever happening again.

    Last week, I announced that Ford will develop an "early warning reporting system" with tire companies that provides information on the real world performance of tires.

    Since last week, we have actively pursued this idea with our tire suppliers and we are encouraged by their reactions.

    Also announced that Ford will provide to NHTSA -- and its counterparts in other countries -- information on our safety actions around the world. From this point forward, when we know something, so will the world.

    In addition, I have requested that Ford's product development experts look into the feasibility of a dashboard indicator for future models which would alert the driver to a potential tire problem.

    I can announce to you today that later this year, beginning with our new Explorer, we will offer our customers a choice of tires.

    Mr. Chairman, I want you and our customers to know that we at Ford will not rest until every bad tire is replaced. And, I will do everything in my power as President of Ford Motor Company to maintain the confidence and trust of our customers. Thank you, and I would be pleased to answer any questions.

    To link to Ford charts that relate to this statement, please click here.

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