The Firestone Tire & Rubber Co. yesterday reported a $127.2 million loss for the quarter ending Oct. 31, blaming much of its toubles on the nationwide safety recall of millions of its 500 steel-belted radial tires.
The bad financial news came as it was learned that the Transportation Department was looking into charges that some 200,000 Firestone 500s manufactured in Sweden and imported to the U.S. may have similar problems to those made in the United States.
The Swedish version of the tire is not covered by the recall, and Firestone officials insist the two tires have "different internal construction."
But two congressmen, Rep. John E. Moss (D-Calif.), chairman of the House Oversight Subcommittee that investigated the domestic 500, and Rep. Robert F. Drinan (D-Mass.) have sent a letter to National Highway Traffic Safety Administrator Joan Claybrook expressing concern over the estimated 200,000 Swedish 500s that have come back into this country as original equipment on Swedish-built cars such as the Volvo.
The congressmen said int their letter that they were "greatly disturbed to learn that no provision has been made for the recall of Firestone 500s manufactured abroad, despite of the fact that it must be assumed that virtually the same technology was used in the production of these tires as was used in the production of domestically manufactured 500s."
The congressmen requested a NHTSA investigation.
Coincidently, NHTSA sent a letter to Firestone last Friday informing the tire maker that the government has received a request from a private citizen to open investigation into the foreign-made 500s.
In its letter the agency requested information from Firestone concern- ing the manufacture and sale of the Swedish 500s, including data on consumer complaints and any lawsuits against the company concerning the tire. The data requested is similar to that used by the agency to declare that the domestic 500 had a "safety-related defect."
In its financial statement made public yesterday, Firestone said it had lost $148.3 million, or $2.58 a share, for the year ending Oct. 31, resulting primarily from pre-tax write-offs of $110 million ( $75 million after income taxes) related to phasing out tire production at some domestic and foreign tire plants and another $234 million ($147.4 million after income taxes) write-off for the recall of several million steel-belted radial tires.
The fourth-quarter loss of $127.2 million ($2.21 a share) came after the write-off for the recall. Aside from the recall and phase-out losses, income for the year was $72.1 million ($1.25) compared with $110.2 million ($1.92) for the same period last year, Firestone Chairman Richard Riley pointed out.
Sales were at record levels for both the year ($4.878 billion) and the quarter ($1.365 billion), the company reported, up from $4.427 billion and $1.208 billion a year ago.
"We are encouraged by the continuing strong demand for our products throughout the world," Riley said.
Firestone also indicated that it had incurred "substantial losses" in European tire operations.