Death of A Partnership - Ford Motor Co., Bridgestone Firestone Inc - Brief Article - Column

Brandweek, June 11, 2001 by Steven Cody, Edward Moed

Ford and Firestone. It was a partnership begun by two giants of industry Henry Ford and Harvey Firestone. A partnership where business and family lines have blurred to the point that current Ford chairman William Clay Ford is the great grandson of both Henry and Harvey.

So what went wrong? How will the corporate divorce affect each party? And what lessons are to be learned?

When news reports began surfacing last summer that something was terribly wrong with the Ford Explorer, Ford quickly began pointing the finger at Firestone's Wilderness tires, and a century of trust began to erode. When Firestone insisted its tires were safe and that the cause for so many deaths was at least partially Ford's fault, the trust eroded further.

Rather than presenting a united front, the two long-term partners began sniping at one another. The alliance was dealt a death blow earlier this month when Ford went around Firestone, shared proprietary research with a Congressional committee, placed blame solely on the tiremaker and said it would replace the Firestone tires itself. On May 21, Bridgestone/Firestone CEO John Lampe served Ford's CEO, Jacques Nasser, with a letter officially terminating the partnership.

With their respective brands sullied, where does each company go from here?

After first re-assuring the public that each is a solid, dependable corporate citizen, Ford and Firestone must quickly rebuild trust within their partner alliances. Having very publicly turned its back on a century-old partner, Ford must convince current and prospective partners they would not share a similar fate should something should go wrong in the future. Firestone, on the other hand, must persuade automobile manufacturers its products are worthy and that a partnership with them is not a risky business proposition.

To ensure their existing and future partnerships succeed, Ford, Firestone and, for that matter, all of Corporate America, should consider these four rules:

1) Establish goals and benchmarks to evaluate the effectiveness of the partnership. Ford and Firestone obviously did this well for 99 years. When the crisis occurred, however, each partner was looking after its own interests instead of the health and well being of the alliance.

2) Manage the partnership. In successful partnerships, both sides are completely open and notify one another of potential issues and crises. In the Ford-Firestone imbroglio, there was very little information sharing. Each could claim the other of having launched a series of sneak attacks. But did they truly maximize the relationship from a financial, marketing and business perspective during the last decade?

3) Evaluate the cost-effectiveness of the partnership. With billions of anticipated dollars in product recalls looming, the cost/benefit ratio of the Ford-Firestone alliance had become nil. So, both parties walked away.

4) Support the alliance with complementary internal and external communications. Continuously leverage partnerships via public relations and marketing efforts including: articles in one another's company newsletters, targeting media about the benefits of the relationship, and sharing the dais at important conferences to demonstrate the value of the relationship.

Firestone can learn an important lesson from the Exxon Valdez accident that created one of the worst environmental disasters. While they were terribly late in addressing the immediate impact of the oil spill, Exxon did act wisely in the long-term by partnering with environmental and educational groups to demonstrate the company's concern about the environment.

Although Firestone's "Making It Right" advertising campaign is a positive development, the tiremaker should partner with a strong consumer watchdog group or respected government body that would place Firestone under a magnifying glass and objectively report on the company's progress regarding safety. This would help repair both its reputation and credibility.

Both companies should have paid more attention to another chapter from history's crisis manual. When Johnson & Johnson was faced with the 1982 Tylenol crisis and the deaths of seven people, they immediately pulled the product from store shelves and developed a newer, safer one.

Rather than pointing fingers, Ford and Firestone should have come together, involved the media, and designed a new Explorer and set of Wilderness tires. Unfortunately this didn't happen. Instead, the acrimonious breakup leaves business partners and consumers confused as to which brand to trust now and in the future, if either.

The next step for Ford and Firestone is to learn from history rather than to become it.

Steven Cody and Edward Moed ore managing partners of PepperCom, a New York-based public relations firm whose clients include Sony, Steelcase, GE and Procter & Gamble.