| Many sterling companies have attained great heights | | | | decided to take this route to minimize capital |
| in the last 100 years, only to plateau, decline and | | | | expenditures. Nevertheless the historic goodwill the |
| disappear. Bethlehem Steel, American Motors, | | | | company had accrued made Firestone Steel Built |
| Montgomery Ward, PanAm, TWA, Faberge and | | | | radials the fastest growing tire in the world in the |
| Marshall Field are prime examples of famous | | | | 1970’s. Unfortunately the company had |
| companies that no longer exist after enjoying | | | | compromised quality in their radial tire production |
| generations of success. There are hundreds of other | | | | process. The result was the largest tire recall in |
| examples. Why do organizations expire after | | | | history in 1978 because of safety concerns. The |
| gathering such power? | | | | company became a favorite target of consumer |
| Currently the three American automobile giants are | | | | groups. |
| staring at an agonizing death by a thousand cuts. | | | | By 1988 Firestone was exhausted from the radial |
| Ford, General Motors and Chrysler are case studies in | | | | battles. The Firestone Tire and Rubber Company was |
| how to lose direction and implode. They have not | | | | purchased that year by the giant Japanese tire |
| responded to changing market conditions, agreed to | | | | manufacturer; Bridgestone. This left only Goodyear |
| unrealistic and unfavorable labor and dealer contracts, | | | | as an American owned producer of tires. Why had an |
| been indifferent to product styling and let the | | | | iconic, historically well managed company, reacted so |
| competition assume a perceived advantage in quality | | | | disastrously to competition and new technology? |
| and price. For these, and many more reasons, their | | | | The best answer, and it applies to all fallen giants, is |
| future is very hazy. | | | | active inertia. Large companies become inert, listless, |
| At one time, these companies were considered great | | | | and ponderous. Their historic corporate relationships |
| examples of superior American management. Their | | | | become blinders. Values harden into dogma’s, we |
| international reputations were among the highest | | | | have always succeeded doing things this way, so we |
| enjoyed by business anywhere. One of the great | | | | will continue to do things this way. Corporate |
| suppliers to the auto manufacturers was Firestone | | | | processes and policies harden into routines. |
| Rubber Company. Firestone’s tale of decline is | | | | Leonard Firestone was a visionary. So was Charles |
| cautionary. | | | | Revson (Revlon), Alfred Sloan the architect of |
| Leonard Firestone built his eponymous tire and rubber | | | | General Motors, Henry Ford, Juan Trippe at PanAm |
| production company during the early 20th century, | | | | and Howard Hughes at TWA. These companies were |
| riding the coattails of the burgeoning American | | | | their heritage. As the businesses evolved into public |
| automobile industry. Firestone was the gold standard | | | | companies and the entrepreneurs who had had the |
| in tire production. Its management was considered | | | | visions to create and nurture their success retired or |
| the best of the five American tire manufacturers. As | | | | died a corporate malaise can set in. Businesses die if |
| the century progressed, the company prospered | | | | this is allowed to happen. |
| greatly but grew arrogant. The business developed a | | | | The United States government is the best possible |
| strange aversion to new product development. | | | | example of failure. This enterprise is structured to fail. |
| In the 1960’s Michelin, a French tire | | | | It is wasteful, duplicitous, mission confused and |
| manufacturer, developed the first radial tire. Firestone | | | | counterproductive. Money cannot be accounted for, |
| decided to stick with belted tires. The advantages of | | | | results are not quantifiable and responsibility for |
| radial tires were soon obvious and the world’s | | | | program failures is never assigned. The government is |
| auto companies gravitated quickly to these new tires. | | | | not created to solve problems, it is organized to |
| Firestone’s American competitors Goodyear, | | | | institutionalize and perpetuate problems. This is why |
| Uniroyal, General Tire and tiny B. F. Goodrich tried to | | | | the bureaucracy enjoys never ending growth, even |
| compete by introducing belted bias tire technology. | | | | as so little is ever accomplished. |
| They were unsuccessful in this effort and soon | | | | History is the best teacher. Those who do not learn |
| decided to jump into the radial business. The great | | | | the lessons of history are bound to repeat their |
| Firestone Company was alone, and very late to get | | | | mistakes. This piece could have been written about |
| into the radial game. | | | | any one of a hundred formerly iconic brands or |
| It took Firestone until 1972 to attempt to market | | | | businesses that failed. The failures are readily available |
| radial tires. A major mistake was made when the | | | | as teaching tools. Hopefully our leaders will start to |
| management of Firestone decided to simply rework | | | | review some of these case histories before deciding |
| belted tire production lines to produce radials. They | | | | which industries are to be winners and losers. |