SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: September 11, 2000
(Date of earliest event reported)
FORD MOTOR CREDIT COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-6368 38-1612444
(Commission File Number) (IRS Employer Identification No.)
One American Road, Dearborn, Michigan 48126
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 313-322-3000
Item 5. Other Events.
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On August 9, 2000, Bridgestone/Firestone, Inc. ("Firestone") announced a
recall of all Firestone Radial ATX and Radial ATX II tires in size P235/75R15
produced in North America since 1991 and all Wilderness AT tires of that same
size manufactured at Firestone's Decatur, IL plant. At the time the recall was
announced, Firestone estimated that about 6.5 million of the affected tires were
still in service. The recall was announced following an analysis by
Ford Motor Company ("Ford") and Firestone that determined there was a
statistically significant incidence of tread separation occurring in the
affected tires. Most of the affected tires were installed as original
equipment on Ford's Explorer,Mountaineer and Ranger models and on Mazda's
Navajo and B Series models (which are manufactured by Ford and sold to Mazda).
Under the recall, owners and lessees of those and any other Ford or Mazda
vehicles with the affected tires are being asked to bring their vehicles
to a Ford, Mazda or Firestone dealer for free replacement tires.
Alternatively, customers can have the tires replaced at other tire dealers
with tires of another manufacturer and be reimbursed up to $100 per affected
tire. Because of the magnitude of the recall and the limited supply of
appropriately sized replacement tires from all tire manufacturers,
Ford expects the recall to take several months to complete. As of
September 6, 2000, Ford estimates that about 30% of the estimated 6.5 million
affected tires have been replaced.
Ford has preliminarily agreed to bear a portion of the costs of
Firestone's recall. In addition, Ford has suspended production of Explorer,
Mountaineer, Ranger and B Series models for the two-week period beginning
August 28, 2000, which will allow Ford to divert about 70,000 replacement
tires for use in the recall. Although Ford expects these actions to reduce
revenues and increase costs, it is too early to assess their overall financial
impact in the second half of 2000.
At this point, neither Ford nor Firestone has determined the root cause of
any defect in the affected tires. The National Highway Traffic Safety
Administration ("NHTSA") is investigating this matter and could conclude that
the recall should be expanded to include other Firestone tires. On September 1,
2000, NHTSA released a Consumer Advisory, suggesting the scope of the recall
could be expanded and recommending that owners of vehicles with certain models
and sizes of Firestone tires not already being recalled take a number of actions
to enhance their safety. Additionally, Congressional hearings on this matter
began on September 6, 2000, at which Ford's Chief Executive Officer, Jac Nasser,
has testified.
In addition, governmental authorities in Venezuela are conducting an
investigation relating to accidents involving Explorers equipped with Firestone
tires. Ford of Venezuela launched an Owner Notification Program ("ONP") in May
2000 to customers with Explorers equipped with Firestone tires. The ONP included
tires produced both in Venezuela and in North America. Ford has found that
many of these recalled tires were not built to Ford's specifications. An agency
of the Venezuelan government, INDECU, has recommended an investigation to
determine whether possible criminal charges should be brought against
both Ford and Firestone. INDECU has also indicated its intention to pursue
a civil case against Ford of Venezuela to seek monetary compensation for
victims of tread separation accidents, civil penalties, and a recall of all
1996 - 1999 Explorers to retrofit them with stiffer shock absorbers.
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On September 5, 2000, Firestone announced its own recall of the same tires
already covered by Ford of Venezuela's ONP.
As a result of the Firestone tire recall, there have been several new
individual personal injury lawsuits and class action lawsuits filed against Ford
and Firestone in state and federal courts across the country. Although the
number of new filings increases almost daily, there are approximately 63
personal injury lawsuits and 35 class action lawsuits pending against Ford.
Among other things, the class actions seek to expand the scope of the recall to
include other tires and to award to consumers the cost of replacing those tires.
Several of the individual personal injury lawsuits and class actions also seek
punitive damages.
Mr. Nasser's statement made at an August 31, 2000 press conference and his
statement made at the September 6, 2000 hearing before a joint session of the
House Subcommittees on Consumer Protection and Government Oversight, filed as
Exhibits 99.1 and 99.2, respectively, to this report, are incorporated by
reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
EXHIBITS
Designation Description Method of Filing
Exhibit 99.1 Press Conference Statement Filed with this Report
Dated August 31, 2000
Exhibit 99.2 Hearing Statement Filed with this Report
Dated September 6, 2000
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on the date indicated.
FORD MOTOR CREDIT COMPANY
(Registrant)
Date: September 11, 2000 By: /s/S. P. Thomas
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S. P. Thomas
Assistant Secretary
EXHIBIT INDEX
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Designation Description
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Exhibit 99.1 Press Conference Statement
Dated August 31, 2000
Exhibit 99.2 Hearing Statement
Dated September 6, 2000