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Continental General to Replace 16-Inch ContiTrac AS Tires

Aired September 19, 2000 - 2:39 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

NATALIE ALLEN, CNN ANCHOR: We have news this afternoon that even more automobile tires are being recalled. This time, the tires are from Continental General. Continental says it will replace 16-inch tire that came as standard equipment on 1998 and 1999 Lincoln Navigator SUVs. The company made the decision after receiving complaints of tread separation.

Officials from both Continental and Ford Motor Company, which makes the Navigator, say they have seen no reports of major accidents or injuries resulting from the tire problems. This recall affects 16- inch ContiTrac AS tires made by Continental General. Again, they were installed on 1998 and 1999 Lincoln Navigators.

It is a much smaller recall than the one affecting Firestone tires, which also have tread separation problems. Continental says about 160,000 of its tires need to be replaced compared to 6 1/2 million Firestone tires.

National correspondent Gary Tuchman has been talking with the president and chief executive officer of Continental. Gary joins us now from Charlotte, North Carolina -- Gary.

GARY TUCHMAN, CNN CORRESPONDENT: Well, that's right, Natalie. We come to you from the headquarters of Continental General here in Charlotte, North Carolina. And it's important to note this company is not calling it a recall because they say it's not a safety-related issue. They say because there have been no deaths or injuries or even accidents, they are calling it a customer satisfaction program.

With us to talk about that is the CEO and president, Bernd Frangenberg. Mr. Frangenberg, thanks for joining us.

Why are you calling it a customer satisfaction program?

BERND FRANGENBERG, PRESIDENT & CEO, CONTINENTAL GENERAL TIRE: Because it's not a safety-related issue. It is not involving anything fatalities, any rollovers, any serious injuries, nor any litigation. It is involving property damage to the vehicle. That's why we called it a customer satisfaction program.

TUCHMAN: OK. Now, what should people do who have these tires?

FRANGENBERG: First, they should see either their Lincoln dealership, or their local tire dealer where they bought the tires, if they bought it at a replacement market. Both these channels have already been provided with more than 10,000 tires so far. And by the end of this week, will have delivered more than 30,000 tires. And we guess that in about six to eight weeks, all the 160,000 tires involved will be replenished.

TUCHMAN: Do you feel in any way this is comparable to the Bridgestone/Firestone situation?

FRANGENBERG: There is no comparison with the Firestone situation. First: because it's not a safety-related issues. I said there are no rollovers, no fatalities, no litigation. But secondly, we know what the cause of the flaw was. We have clearly identified it. We have taken corrective action. And we know that the correction is effective.

TUCHMAN: For those of us not -- for those of us not in the tire industry, what is the flaw?

FRANGENBERG: The flaw is that -- we call it is a belt lift -- that parts of the tread are lifting. And this may cause -- this may result, after a while, in fragments of the tread coming off the tire and damaging the body of the vehicle.

TUCHMAN: Bridgestone/Firestone and Ford have been pointing fingers at each other. The Lincoln Navigator is a Ford vehicle. Any problems with Ford regarding this issue, sir?

FRANGENBERG: No, we have been working with Ford very cooperatively on this issue. And the Navigator is a well-designed vehicle.

TUCHMAN: You came forward to the federal government to tell them about this situation?

FRANGENBERG: We came forward to NHTSA today. We shared our data with them. They have confirmed the data with their own database. And there may be continued dialogue. And we are looking forward to corporate with NHTSA if there is further -- any further requirements or any information needed.

TUCHMAN: Final question for you, sir: How concerned are you about the business impact of this?

FRANGENBERG: Well, I think safety comes first for us. The tire is a very critical item on the vehicle. And customer satisfaction is number one for us. So I think we did the right thing. And I'm sure that, in the end, public -- the public will honor it. Even in spite of that somewhat heated situation with Firestone, we felt we have to deal with that situation quickly, effectively, and swiftly.

TUCHMAN: Bernd Frangenberg, CEO of Continental General, thanks for joining us. We appreciate your time.

FRANGENBERG: Thank you very much.

TUCHMAN: So a total of 160,000 tires, including replacement tires from 38,000 vehicles will be given back to stores. And people who own those can get new tires for their Lincoln Navigators.

This is Gary Tuchman, CNN, live, in Charlotte, North Carolina.

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