Posted on: Tuesday, August 14, 2001
Judge delays trial in Ford ignition case
By David Kravets
Associated Press
HAYWARD, Calif. — A proposed settlement that could cost Ford Motor Co. as much as $1 billion prompted a judge to postpone a class-action trial yesterday on claims that faulty ignition switches caused millions of cars and trucks to stall.
Superior Court Judge Michael Ballachey met privately with attorneys before confirming that settlement talks are ongoing. He sealed the transcript of the meeting and slapped a gag order on attorneys.
Four months ago, the judge ordered Ford to recall as many as 2 million vehicles in California. Under the settlement deal described by attorneys Sunday, Ford would offer not a recall but a warranty extension that could cover as many as 5 million vehicles nationwide; owners would be reimbursed for replacing ignition switches.
"I think this is basically a win for consumers," said Jeff Fazio, a lead attorney in the class-action case against Ford. "It could have been years before the cars were fixed, but with this it could come soon."
Ballachey has said Ford misled government inspectors and was living in an "Alice in Wonderland" dreamland by denying that defective ignition switches were installed on some 23 million vehicles.
A settlement would limit the financial exposure to Ford, which is already involved in a recall of tires on its Ford Explorers. The tires and vehicles are being investigated in connection with more than 100 highway deaths.
The Detroit automaker denies the ignition devices are defective, but has already settled hundreds of wrongful death, injury and other lawsuits in connection to allegations of Ford vehicles stalling.
"All government data — 18 years' worth — prove that our vehicles are as safe or safer than other vehicles," the company said yesterday, adding that investigations by the National Highway Transportation Safety Administration found no safety defect.
Ballachey, however, said Ford concealed information from federal safety regulators, who were studying hundreds of complaints about Ford vehicles stalling, and an NHTSA official said the government would not have closed the case if Ford had given the agency key documents unveiled in the class-action case.
The suit challenged Ford's placement of the thick film ignition (TFI) module, which regulates electric current to the spark plugs. In 300 models sold between 1983 and 1995, the module was mounted on the distributor near the engine block, where it was exposed to high temperatures.
Ballachey, the nation's only judge to order a vehicle recall, found last year that Ford was warned by an engineer that high temperatures would cause the device to fail and stall the engine. Ford's own documents show the company confirmed the problem in internal studies and could have moved the module to a cooler spot for an extra $4 per vehicle.
The automaker had argued that said judges do not have the same power as does the NHTSA to order a vehicle recall.
Under the proposal described Sunday, Ford said it would replace ignition devices on all Ford vehicles nationwide that have stalled and have no more than 100,000 miles — which is an estimated 500,000 to 650,000 vehicles in California and an estimated 5 million nationwide.
The agreement also says Ford will extend all warranties to 100,000 miles for affected vehicles and pay to replace the ignition if it stalls and needs replacing before the new 100,000 mile warranty is up.
Under the deal, the vehicles could be fixed or the cost of previous replacements could come as early as next year, Fazio said.
Fazio based the $1 billion figure on court records in which Ford has said it would cost $150 or more to replace each switch.
However, Ford issued a statement saying "the cost of $750 million to $1 billion currently being speculated about in the media are substantially overstated."
The judge scheduled the next meeting with attorneys for Aug. 20 and delayed jury selection to Aug. 27.
