Ford's Nasser addresses Congress

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Here is a complete transcript of Jacques Nasser's testimony before the joint subcommittees of the House of Representatives Committee on Energy and Commerce yesterday. Nasser is CEO and president of Ford Motor Co.

"Good morning Mr. Chairman, Congressman Dingell and members of the committee. I am Jacques Nasser, President and CEO of Ford Motor Co. I am here today to explain the reasons behind our decision to replace 13 million Firestone tires on Ford vehicles. I am also here to answer any questions the committee may have on the steps we have taken to protect the safety of our customers.

"For nearly 100 years, our company has thrived because we have been responsive to our customers and our communities around the world. In all the actions we have taken, we have been guided first and foremost by our commitment to safety. We have also been driven by facts -- real world performance data, as well as laboratory analyses. We have shared all the data and analyses openly, and have worked with NHTSA (National Highway Traffic Safety Administration) and with Firestone to better understand the causes of the tread separation problem with Firestone ATX and Wilderness AT tires.

"Why we are replacing the tires: On May 22nd of this year, Ford announced that we would replace all Wilderness AT tires used on Ford vehicles because of concerns about the performance of the tires as they age, creating unnecessary risks for our customers. While some of the tires being replaced do not show a substantial failure risk, we are replacing all Wilderness AT tires to avoid any confusion for our customers and eliminate any doubt about the quality of their tires.

"Last summer, while the data indicated elevated rates of tread separation on the 6.5 million ATX and Decatur-built Wilderness AT tires, which resulted in the Firestone recall, we did not have enough information to understand why the tires were failing.

"Immediately after the recall, we assembled a team of technical experts to find the causes of the tread separation problem. The purpose of the investigation was simple: We had to be certain that the tires on our vehicles were as safe as possible for our customers. The "Tire Team," as it became known, spent more than 100,000 person-hours analyzing real-world data, investigating accidents, testing tires and vehicles, running computer simulations and studying tire designs.

"Our Tire Team worked closely with NHTSA every step of the way. We also shared our data and analysis with Firestone and Dr. Sanjay Govindjee, who conducted an independent investigation at Firestone's request.

"As part of that intensive work, we developed a laboratory test to duplicate the failure mode experienced in the field. We developed better statistical analysis of claims data that allowed prediction of trends in failure rates. We worked with NHTSA to understand failure rates in competitive tires. And we did detailed engineering analyses of failed tires to give us an understanding of real-world failure mechanisms. Our findings proved consistent with the findings of Dr. Sanjay Govindjee.

"We reached the following conclusions based on our data and analyses:

* Firestone's Wilderness AT tires experience higher rates of tread separations than other tires, including the Goodyear tires used on the Explorer.

* Firestone's ATX and Wilderness AT tires fitted to Ford vehicles have temperature characteristics, wedge design characteristics and rubber properties, including peel strength, that demonstrate they are more sensitive than other tires to the stresses caused by ordinary use. This correlates with their significantly higher failure rates in the field.

* Firestone's ATX and Wilderness AT tires have different designs, constructions and performance characteristics depending upon when and where they were manufactured. The Goodyear tires used on Explorers do not exhibit this degree of variability.

* Firestone's Wilderness AT 16-inch tires with a recommended inflation pressure of 30 psi perform about the same on the Explorer as the 15-inch tires with a recommended inflation pressure of 26 psi from the same Firestone plant.

"Based on our laboratory testing and results, we were able to make predictions that could be confirmed by real-world data. Then, on May 11th of this year, we received the latest claims data from Firestone which showed a rising trend in failure rates for Wilderness AT tires, further validating our analyses and predictive model. With these pieces of the puzzle coming together, we felt we had sufficient information to take action in the best interest of our customers.

"Last summer, the elevated levels of tire failures on the recalled tires sent a very strong signal. What we learned since then allowed us to analyze failure trends more precisely. So, while claims alone today do not present as strong a signal as last August, our model suggests that the rate of failures is increasing significantly as the tires age, a risk that we cannot ask our customers to accept.

"We really had only two choices -- wait until more failures proved conclusively there is a growing problem, or act now on the basis of our analyses and the data available. With hot weather driving conditions approaching, we knew the risk of tread separations would increase. As a result, in the interest of the safety of our customers, we could not wait.

"Progress to date: In the first week of June, after reviewing our proposed customer letter with NHTSA, we notified millions of customers of our analysis and the details of our replacement program. At the same time, we were qualifying tires as fit for replacement through our testing processes.

"We have, so far, identified approximately 60 types of replacement tires. We also reviewed the list with NHTSA to ascertain that there were no pending concerns with the qualified tires.

"To build the pipeline of replacement tires, we entered into discussion with tire manufacturers. So far, an additional two million tires have been made available, and we have taken 2-3 down weeks at several of our plants to help fill the supply pipeline and give the tire manufacturers time to ramp up production. The desire to quickly increase replacement tire production was another reason we felt we had to announce the replacement program as soon as possible.

"We are qualifying tires based on the new testing procedures developed by the Tire Team. In addition, the tire manufacturers are providing claims data from the early warning system developed as a result of the TREAD Act. These data, together with our predictive models, give us confidence that the replacement tires will meet the needs of our customers.

"The Explorer is a safe vehicle. The data tell us that the problem is with the tires and not the vehicle. There are about three million Goodyear tires that were built to the exact same Ford specifications and were put on Explorers during 1995-1997 (and as replacements for these vehicles in subsequent years). These tires are performing almost flawlessly, having generated only two tread separation claims.

"At the same time, a similar number of Explorers built at the same assembly plants but equipped with Firestone tires have experienced 1,183 tread separations, with the same type of customer and the same geographical/climatic distribution of vehicles. The difference in tire failure rates therefore cannot be attributed to the Explorer.

"It has been alleged that the reason Goodyear tires had few tread separations is that they are a "B" graded tire according to the Uniform Tire Quality Grading Standards (UTQGS), while the Wilderness AT has a "C" rating. In fact, millions of tires on GM and Toyota vehicles, for example, are "C" rated, but have not had tread separation problems.

"Another charge is that the Explorer had insufficient load reserve -- or margin of safety -- for the tires. The field data show, however, that there is no correlation between load reserve and tread separation claims on these vehicles. Goodyear tires had the same load reserve at 26 psi yet had no tread separation problem. Furthermore, the Firestone 16-inch Wilderness AT tires, which are specified at 30 psi, had elevated claims even with 300 pounds more load reserve. Lastly, the Explorer's load reserve is similar to other SUVs.

"There have also been allegations that Explorer is causing the tire "problem" since Ford Ranger is fitted with the same tire, yet experienced fewer tread separations. The only time the same size tire was used on the Ranger and Explorer was as an option on the four-wheel drive model of the Ranger. The vast majority of these vehicles were sold in northern climates where four-wheel drive is in high demand. When Decatur-built Wilderness AT tires -- these were recalled by Firestone last August -- were placed on 4x4 Ranger pickup trucks in the hot states, they failed at statistically similar rates as the tires on the Explorer.

"The Wilderness AT tires used as original equipment on the Explorer are also installed as aftermarket tires on a wide variety of non-Ford vehicles, and these vehicles have experienced a significant number of tread separations, some resulting in accidents. There are a total of 167 non-Ford claims of tread separation and 66 of these are on competitive SUVs. These claims include claims for tread separations on tires not included in last year's recall.

"The total number of Wilderness tires used as aftermarket replacements on competitive vehicles is not known, but is believed to be relatively small, suggesting an elevated failure rate, comparable to that experienced by original equipment Firestone tires on the Explorer. In addition, there are 236 claims on Ford vehicles that are not Explorers on these same tires, again suggesting that the problem is with the tires.

"In spite of this strong statistical evidence that this is a Firestone tire problem, we were not satisfied to stop at an investigation of the tires alone. As a designer and manufacturer of vehicles for almost 100 years, Ford used its knowledge of vehicle engineering to do an unblinking review of tire-vehicle interaction. All through this process we shared our findings with NHTSA and Firestone.

"We conducted four major analyses in our safety investigation that focused specifically on the vehicle. We looked at whether the Explorer design could cause an elevated rate of tread separation claims, and we found that this was not the case: We were able to reproduce the tire failure mode in the laboratory, independent of the Explorer, confirming the field data on Firestone and Goodyear tires.

"We looked at whether the Explorer behaved differently, compared to peer vehicles, during a tread separation. In all, we tested 24 different vehicles in 60 tread separation tests and more than 1,000 vehicle dynamics tests and hundreds of computer simulations; the data we generated confirmed that the Explorer behaves similarly to other SUVs.

"We looked at whether Explorer behaved differently after a tread separation, and the data show that its performance falls within the range of other vehicles in its class. And we looked at the crashworthiness of the Explorer, and again found that it was comparable or better than peer vehicles. Overall, the Explorer performed similarly to other SUVs before, during and after a tread separation.

"Importantly, the results obtained in thousands of hours in the laboratory and on the test track are confirmed by 10 years of real world performance.

"The analysis of government data show that the Explorer is among the safest of the comparable SUVs.

* The Explorer is 17% safer than the typical comparable SUV in all types of fatal crashes.

* The Explorer is 19% safer than the typical comparable SUV in fatal rollover accidents.

* The Explorer is safer than the typical comparable SUV in all crash types - front, side, rear and rollover crashes.

* The Explorer is involved in 19% fewer accidents of all types (fatal and non-fatal) than the typical comparable SUV.

"Explorers have successfully traveled enormous distances in the last 11 years. More than four million Explorers have been sold, and over 3.5 million of these are still in service. Explorer drivers have collectively driven the equivalent of more than 13 million years. Explorers have been driven more than 150 billion miles.

"Insurance data also show the Explorer has a strong safety record. Data published by the Highway Loss Data Institute (HLDI) show that the Explorer in all its derivatives, such as model type -- two-door vs. four-door and two-wheel drive vs. four-wheel drive -- has an injury loss claims record better than the average car, ranging up to 32% better.

"Explorer has a fine record in government and consumer testing:

* Explorer has scored four or five stars -- the highest rating -- in government NCAP frontal and side crash tests.

* Explorer is similar to competitive SUVs in the government's experimental rollover resistance rating, based on the static stability factor (SSF).

* Explorer received the second-highest rating from the Insurance Institute for Highway Safety (IIHS) in its frontal offset crash tests. Just one SUV got a better rating, while four received lower ratings.

"All in all, no other SUV has such a strong combination of field and testing performance.

"Analysis of Firestone tire claims data also confirms that the accident and the rollover risk for the Explorer when a tread separation occurs is comparable to other SUVs. Since tread separation accidents are still relatively rare events, the sample size of the data is quite small and the confidence interval is wide. We will continue to share our analysis with NHTSA and Congress to confirm our understanding.

"However, nothing in the data that we have analyzed supports recent accusations that the Explorer is behaving atypically among SUVs. The Explorer is as safe as other SUVs before, during and after a tread separation.

"A recent analysis conducted by Dennis Guenther at the request of Firestone purports to show deficiency in the safety of the Explorer on the basis that it does not have enough "understeer margin" to prevent oversteer in the linear range when it suffers a tread separation at the rear. We strongly disagree with the statements made by Firestone regarding this study. The Firestone test is unreliable because it did not test enough vehicles or conditions to support their conclusions.

"It used too few models -- only two compared to Ford's 15 SUV tests. It has test repeatability and data reduction issues. It tested only on one road surface.

"It did not test the actual event of tread separation. It did not test under the demanding circumstances in which tread separations occur in the real world.

"Its results are inconsistent with real-world accident data.

"Firestone's allegations would imply that not only Explorer, but 12 other vehicles we tested made by the world's leading motor vehicle manufacturers also do not meet Guenther's understeer criteria. This illustrates the absurdity of Firestone's position.

"The Explorer, like all its peers and every vehicle made, has handling characteristics which are optimized for safety with four treaded tires. According to our test results, its handling and steering characteristics are remarkably close to those chosen by BMW and Mercedes Benz, as well as the most recent entries from Jeep, Dodge, and even the new TrailBlazer has less understeer than the Explorer. These characteristics help the driver to achieve safe operation in all foreseeable circumstances.

"Even the two vehicles that meet Firestone's understeer criteria have experienced rollover accidents after a tread separation on Firestone tires in the real world.

"Finally, we will not accept that a tread separation is a 'normal foreseeable event' that manufacturers must accommodate through vehicle design as asserted by Firestone. No vehicle we have tested can deal with a tread separation well enough to avoid a small but significant risk of loss of control with a treadless rear tire... other tire manufacturers such as Continental and Goodyear do not accept that tread separation is a normal or common occurrence that should be part of the vehicle design requirements.

"NHTSA's data show that other tire manufacturers have demonstrated that it is possible with current technology to design tires that do not separate. We know the best way to prevent accidents caused by tread separations is to prevent tread separations, and that is why we are replacing the Firestone Wilderness AT tires on our vehicles.

"In summary, we have been guided throughout by our number one priority, the safety of our customers.

"Ironically, last summer we were criticized by some for acting too slowly. Now, we are being criticized for acting too swiftly. In both cases, we have been driven by the facts and analyses available. We have shared data continuously with NHTSA, Congress, and Firestone. I assure the committee that the decision that we took to replace these Firestone Wilderness AT tires was not taken lightly. The cost of the replacement program is about $3 billion. We feel this expenditure is necessary to protect the safety of those who have put their trust in us. And, we will make that decision any time that the safety of our customers is at risk."

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