Saturday, April 20, 2024

Ford shares in Firestone recall costs

Ford Motor Co. said Thursday the Firestone tire recall should cost it $500 million as expected, not including untold costs of defending itself against and settling lawsuits over crashes involving the questioned tires.

Henry Wallace, Ford’s chief financial officer, said the half-billion dollars the automaker figured the massive recall would cost it in lost production, among other things, has been split evenly over its past two earnings quarters.

“As for the litigation, that’s going to go on for some time,” he said.

Roughly 200 lawsuits have been filed against Ford and Bridgestone/Firestone Inc. over crashes involving the tires, 6.5 million of which were recalled last summer. Many of the tires were standard equipment on the Explorer.

The National Highway Traffic Safety Administration links 148 deaths and more than 525 injuries in the United States to separations, blowouts and other tread problems in Firestone’s ATX, ATX II and Wilderness AT tires.

Without elaborating, Ford has said it would share some costs of the recall with Bridgestone/Firestone, which has said the recall could cost it about $350 million.

Bridgestone/Firestone admitted poor tire design and manufacturing, were partly responsible for defects being investigated. The tire maker also blames Ford for errors in the design of the high-riding Explorer.

Last month, the tire maker set aside $750 million to cover the recall’s cost and potential legal liabilities, though it said the fund was not an admission of legal responsibility.

ASSOCIATED PRESS

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