Big Corporations, Big Lawsuits Essay

presentmentThe fairnesssuit over the forged design of Firestone tires put on ford Explorers was perhaps the most publicised event when a company was sued for defective produce. This defect also resulted in a large number of accidents causing over 200 deaths and 700 injuries in the US alone, in addition to accidents in Venezuela, Columbia, Ecuador, the Arab Gulf Coast, and East Asia. The massive tire withdraw by crossbreeding and Firestone on August 9, 2000, sent ripples through the American public and added give the sack to the legal fire, causing both manufacturers and the public to rethink many issues. compact of the LawsuitOn August 9, 2000, cut across Motor Company and Bridgestone/Firestone together with announced a recall in the United States of approximately 6.5 billion ATX, ATXII and Wilderness AT tires made in Decatur, Illinois because of tread separation paradoxs (Eto, 2006). This recall came after the increased incidence of driver deaths in accidents in which fo rd Exlorers rolled over triggered widespread public concern. At the succession, the company was already faced with multimillion lawsuits. For instance, the lawyers for Edelio and Norma Herrera who died in May 2000 overturning in their Ford Explorer on the authority from Disneyland demanded $1 billion from Firestone (BBC).The lawsuits filed, for instance, by the law firm Lieff Cabraser Heimann & Bernstein, LLP, were ground on the claim that Firestone and Ford were guilty because it had failed to address the concerns in the interrogatory process. Thus, on June 15, 1989, the auto makers engineers prepared a communicate to the company management in which they recommended eight design changes to address the rollover problem and improve the safety of the Explorer (Lieff Cabraser Heimann & Bernstein, LLP, 2006). However, the management refused to make the study improvements recommended by engineers, willing to complete the design by the previously announced deadline. involve on the C orporate WorldThe lawsuit triggered a nation-wide discussion nearly the liability of auto manufacturers, business ethics, the need to produce quality products, and the ordinance of the industry. The fact that Fords management had accelerated production at the expense of safety concerns only to face billions of dollars in lawsuits and a major blow to their reputation later on was a lesson to many managers.The way Firestone and Ford were heaping blame on each other was also an burning(prenominal) lesson of how companies should not handle a poop. To demonstrate commitment to improvement, Ford, for instance, ended its race with the tyre-maker (BBC, 2001). The scandal affected one of the largest US auto manufacturers, causing the sufferance of its Chief Executive Officers, Jacques Nasser.Impact on RegulationsThe lawsuits have also alerted the American public and regulators at the National Highway Traffic Safety government activity (NHTSA) that new, tougher laws on safety standards have to be adopted. In 2000, US sexual congress adopted new legislature that aimed to raise safety standards. However, it was clear that much(prenominal) laws should have been adopted long ago when the danger of rollover crashes in SUVs became apparent. The law required tire makers to submit to the regulators far more information around their produce than before.Impact on the CompaniesThe lawsuits that have been partly successful and partially settled out of court cost both companies, especially Firestone a lot. Thus, the tyre manufacturer found itself spending over $1.6 billion in 2001 due to the recall and litigation costs (Online attorney Source, 2004). The company fagged $149 million to settle 30 class-action suits all over the US. In 2001, Ford warned its shareholders that it could face up to $10bn in lawsuits arising from the Ford Explorer deaths (BBC, 2001). The result was inglorious publicity for both companies. Firestone in particular took a long time to recover. As of 2004, it was spending several times more on get publicity than in the year before (Online Lawyer Source, 2004).ConclusionThus, the scandal resulted in massive financial losses for the two companies involved and blows to their somatic images. It also made the public pay closer attention to manufacturers good decision-making. On the government level, safety standards had been strengthened resulting in increased requirements for manufacturers.ReferencesEto, G.C. (2006). Firestone tucker Recall. Retrieved April, 1, 2006, from http//www.garyeto.com/firestone-tire-recall.shtmlBBC. (2001, June 17). Firestone faces $1bn lawsuit. Retrieved April, 1, 2006, from http//news.bbc.co.uk/1/hi/business/1393055.stmLieff Cabraser Heimann & Bernstein, LLP. (2006). Ford Explorer Rollover Danger 2006 Update. Retrieved April, 1, 2006, from http//www.vehicle-injuries.com/ford-explorer-lawsuits.htmOnline Lawyer Source. (2004). Firestone Recall Information. Retrieved April, 1, 2006, from http//www.o nlinelawyersource.com/firestone/information.html