Ford Motor Company (F), Dow Jones Industrial Average (.DJI): The IPO That Inflated the Dot-Com Bubble

At the center of the recall was the Ford Motor Company (NYSE:F) Explorer sport utility vehicle, on which the treads of defective Firestone tires would peel off at alarmingly high rates. Once the link between the Ford Motor Company (NYSE:F) Explorer and Firestone’s tires became public knowledge, the two companies began a bitter back-and-forth blame game, as each tried to accuse the other of concealing prior knowledge of the defects. Ford Motor Company (NYSE:F) quickly stepped up with an unprecedented offer to replace all Firestone tires of the affected model — including those not subject to Firestone’s recall — at its own expense. This brought the total number of recalled tires up to about 14.4 million, pushing its size past the previous record-setting recall of 7 million tires, also initiated by Firestone in 1978.

Firestone and Ford Motor Company (NYSE:F) had worked together since the first Model Ts rolled out of Henry Ford’s earliest plants in 1908. After the recall, their relationship ended. Following the resignation of Bridgestone’s Japanese chief executive in 2001 — a necessary move after the company’s profit fell by 80%, and its Firestone sales collapsed by 40% by the end of its 2000 fiscal year — new CEO John Lampe severed his company’s relationship with Ford Motor Company (NYSE:F), publicizing a letter sent to Ford’s CEO blaming the automaker for breaching Bridgestone’s trust, and using Firestone as a scapegoat during the recall fiasco.

The article The IPO That Inflated the Dot-Com Bubble originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.The Motley Fool recommends Ford. The Motley Fool owns shares of Ford and Microsoft.

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