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US fraud prosecutors demand Ford Focus, Fiesta documents

Phoebe Wall Howard, Detroit Free Press on

Published in Business News

Goebel, a trial attorney for the U.S. government who has prosecuted corporate fraud and bank scams, issued the paperwork on April 11, ordering Stern to appear at the courthouse on Constitution Avenue at 9 a.m. May 3.

Transmission maker

Getrag, central to some of the DOJ questions, is a Germany-based global supplier of transmissions now owned by Canada-based supplier Magna International after a bankruptcy. Getrag made the DPS6. In documents the Free Press obtained earlier this year, Ford blamed the supplier for the flawed design.

On March 20, 2014, senior purchasing manager Thomas Miller at Ford wrote, "Our involvement is one focused only on manufacturing of the DPS6, not the design. Getrag ... owns the design and Ford is not allowed to even have the component drawings for the DPS6. As Ford believes strongly this is a design failure, Getrag should reimburse Ford for 100% ... we need to be clear where the responsibility lies."

Documents obtained by the Free Press after July publication of its Out of Gear investigation outlined Ford's strategy to win compensation from Getrag over "lack of robustness of seal design," which was causing fluid to leak, contributing to transmission problems. Ford's "recovery next steps" sought a settlement with Getrag "with a priority on cash payments, but with flexibility to incorporate other Ford wants."

These internal Ford documents -- sent to the Free Press by a person who "worked for and with Ford" -- included "recommended talking points" prepared for Ford's Mark Fields to use in negotiations with Getrag President Tobias Hagenmeyer. They included:

 

We appreciate Getrag's continued support of the work to understand the technical issues related to the DPS6 warranty.

After significant analysis, Ford has determined that we must go ahead with two customer service actions to address the seal leak concerns. The first is a proactive repair, and the second is an extension of the warranties for affected customers' vehicles.

All of our technical data showed that the failure rate would continue to increase over time.

It's also important for you to understand that Ford will not call out Getrag publicly over this concern. All of our communication will be focused directly at the individual customers. Ford will respond to the media, if asked, by emphasizing that we already have a robust fix in place and we want customers to know that we are taking extra measures to ensure their full satisfaction.

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