Hawaii to get $500,000 NASHVILLE, Tenn. >> Bridgestone/Firestone Inc. said today it will pay states at least $41.5 million -- and possibly up to $10 million more -- to head off lawsuits over defective tires.
in tire settlement
Bridgestone/Firestone agrees to
pay states at least $41.5 million
to head off further lawsuitsBy Karin Miller
Associated PressUnder the settlement, each of the 50 states, the District of Columbia, Puerto Rico and the Virgin Islands will get $500,000 from Nashville-based Bridgestone/Firestone. There are no restrictions on how the money can be spent. The company will spend $5 million on a consumer education campaign and $10 million to reimburse attorneys' fees for the states. The deal could also include up to $10 million more to reimburse customers who were improperly denied replacement tires.
Bridgestone/Firestone Chief Executive John Lampe said in a written statement that the settlement "permits us to focus our energies and our resources on rebuilding our company and the Firestone brand."
"While we take serious issue with many of the states' allegations, we believe that significant portions of the settlement, such as those related to consumer education, are very much in line with the company's own initiatives," he said.
Tennessee Attorney General Paul Summers lauded the deal.
"We believe and we alleged that Bridgestone/Firestone did some things wrong. We believe that Bridgestone/Firestone violated our consumer protection law. They are now paying for some of their wrongdoing," Summers said.
Tennessee led a group of attorneys general from throughout the nation who spent more than a year investigating whether Bridgestone/Firestone and Ford Motor Co. were aware of problems with Firestone tires, most on Ford Explorers, before a recall was announced during the 2000 summer.
The settlement does not mention Ford and Summers said Bridgestone/Firestone is now assisting in that investigation.
Ford, which used Wilderness AT tires as standard equipment on its best-selling sport utility vehicles, did not immediately return phone calls. According to the settlement, Bridgestone/Firestone has spent $450 million on customer restitution.
Bridgestone/Firestone agreed to recall 6.5 million ATX, ATX II and Wilderness AT tires on Aug. 9, 2000, after receiving reports that some tires suddenly failed. Since then, federal investigators have documented 271 deaths from thousands of accidents involving the tires.
The federal government closed its investigation last month after Bridgestone/Firestone agreed to recall 3.5 million more Wilderness ATs.
Federal investigators found the design of the Wilderness AT and the ATX produced before May 1998 could cause higher stress at the edge of the steel belt and lead to a separation.
Bridgestone/Firestone added a thicker strip of rubber between the two steel belts on the sides of the tire and changed the tire's material composition in the spring of 1998. The federal investigation focused attention on tire safety and had far-reaching consequences for consumers and Bridgestone/ Firestone and Ford, both of which set aside hundreds of millions of dollars to deal with suits. Congress passed a law last year updating U.S. tire standards, requiring government tests of rollover risk and other changes to auto safety laws.
Ford and Bridgestone/Firestone worked together at the beginning of the investigation, but their century-long relationship publicly unraveled during congressional hearings when officials from each company blamed the other for the problems. In May, the two companies severed ties.