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US fraud prosecutors demand Ford Focus, Fiesta documents

Phoebe Wall Howard, Detroit Free Press on

Published in Business News

Further, given the ongoing partnership between Getrag and Ford across all parts of our business, I want to ask for your help to expedite a financial settlement. It is not my intent to negotiate with you today, but I do want you to understand the significant cost to Ford.

A 2016 DPS6 update, obtained earlier by the Free Press, noted that a "seal and clutch settlement" with Getrag involved a $50 million payment that released the supplier from claims as well as a $250 million maximum payout over 10 years related to a settlement among Ford, Getrag and another supplier. Ford also obtained from Getrag a factory in Irapuato, Mexico, as part of the deal.

Fields, a former Ford CEO, gave a deposition in DPS6 litigation this summer.

Looking back

Ford issued more than 20 technical service bulletins relating to the Focus and Fiesta models, with none of them being a "consistently reliable repair," reported Carscoops in 2017. Many owners have told the Free Press of continuing problems despite multiple repairs.

By late 2012, Ford had sold more than half a million of the cars and complaints were pouring in.

"There is no fix at this time," system testing engineer Tom Hamm wrote in an October 2012 email to four colleagues. "We have a task force working on the issue but they haven't identified any fixes at this time."

Ford had earlier warnings that the transmissions had significant problems.

On Aug. 31, 2010, six months before the 2012 Focus hit the market, product development engineer Tom Langeland emailed colleagues and supervisors describing "nasty launch judder" -- intense vibration from a stop -- that "did not clear up after many miles of driving."

"We also cannot achieve a driveable calibration that will get us to production," he wrote. "The clutch torque delivery MUST BE IMPROVED."

In 2014, Ford extended the powertrain warranty from five years and 60,000 miles to seven years and 100,000 miles for vehicles built through mid-2013, as outlined in Fields' Getrag talking points.

In August 2019, a month after the Free Press' publication of Out of Gear, Ford offered the same warranty extension on 2014-16 Focus and 2014-15 Fiesta vehicles assembled after July 4, 2013. It also noted in August that, in addition to the clutch warranty extension, all 2011-15 Fiestas and 2012-16 Focuses are covered for 10 years and 150,000 miles for the transmission control module, whose failure can cause the cars to default to neutral.

The transmissions, which boosted fuel economy to meet federal standards as gas prices spiked, were introduced in the 2011 model year Fiesta and 2012 Focus. They were used until the Focus was discontinued with the 2018 model year and until the 2019 Fiesta.

 

Ford has said it believed the transmissions were sound when the vehicles launched and insists the cars have always been safe. The company acknowledges that it considered changing the transmission technology at one point and says problems emerged after vehicles were on the road that were more complex and took longer to fix than it expected. Yet a Ford document obtained by the Free Press shows that customers blamed the transmissions for accidents in vehicles with less than 1,000 miles on them.

After publication of Out of Gear, three members of Congress called for NHTSA, which declined to formally investigate the transmissions in 2014, to re-examine the situation. NHTSA said in July it was studying "all available information, including consumer complaints."

On the same day in August that Ford extended the warranty on Focus and Fiesta vehicles built after mid-2013, NHTSA said that its review did not find "an unreasonable risk to safety," the legal threshold for safety-related defect determinations under federal law.

Back in 2014, Ford approved adding a dashboard warning light to tell drivers the transmission is at risk of malfunction, a move described in company documents as something that "will more easily satisfy NHTSA's requirements."

While the Justice Department did not comment,a fraud investigation could center on whether Ford misled consumers into believing a warranty would cover problems the company knew could not be fixed, and/or whether Ford misled consumers by suggesting that the problems experienced were part of normal operation.

Overseas, Ford paid a fine of $10 million ($7.6 million U.S.) to the Australian government for the "unconscionable" mistreatment of consumers blamed as bad drivers when they complained of transmission issues.

"Ford knew the symptoms of the quality issues with the vehicles were experienced intermittently, but required customers to demonstrate them on demand in the presence of a dealer in order for repairs to be undertaken," Rod Sims, Australian Competition and Consumer Commission chairman, said in April 2016.

That case involved about 10,500 customer complaints over Focus, Fiesta and some EcoSport models made from 2011-15 with DPS6 transmissions.

(c)2019 Detroit Free Press

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