Ford to settle suit over ignition switches

David Kravets

Monday, Aug. 13, 2001 | 10:48 a.m.

SAN FRANCISCO -- In a deal that could cost Ford Motor Co. as much as $1 billion and affect millions of vehicles, the automaker has agreed to settle a lawsuit that alleges many of its cars and trucks stall.

The agreement ends years of litigation in which a California judge said the Detroit automaker was living in an "Alice in Wonderland" dreamland for denying ignition switches were defective.

The proposed settlement comes four months after Alameda County Superior Court Judge Michael E. Ballachey ordered as many as 2 million vehicles in California recalled as part of a statewide class-action suit in which the judge found that Ford concealed the shabby parts from government inspectors.

Although the case was in California, attorneys said the settlement, if approved by Ballachey, would cover 5 million vehicles nationwide.

"I think this is basically a win for consumers," said Jeff Fazio, a lead attorney in the case against Ford, said in an interview Sunday night. "It could have been years before the cars were fixed, but with this it could come soon."

Under the agreement, Ford said it would replace the ignition devices in 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 automaker denies the ignition devices are defective and stall, but already has settled hundreds of wrongful death, injury and other suits in connection to allegations of Ford vehicles' stalling.

The suit challenged Ford's placement of the "thick film ignition module," which regulates electric current to the spark plugs. In 300 makes and 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 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 that 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 300 makes and models include Ford's Taurus, LTD, Ranger, Bronco, Mustang and Escort, according to Ford. Cars from Ford's Lincoln and Mercury divisions that had the device include the Town Car, Sable and Grand Marquis.

The agreement 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.

The agreement wipes out the judge's recall order of some 2 million vehicles on California's roads that have the ignition device in them.

Ballachey's recall ruling was in the preliminary stages of the case, which was expected to go to trial later this month.

Ballachey said Ford concealed the stalling information from federal safety regulators, who were studying hundreds of complaints about Ford vehicles stalling.

The government found no safety problems with the modules, but a National Highway Traffic Safety Administration official said the government would not have closed the case if Ford had given the agency key documents unveiled in the class-action case.

Fazio said he settled because, under the recall order, it could have taken years, if ever, before the vehicles would have been fixed. That is because Ford had said it would appeal the recall order, which affects all 1983-1995 Ford models in California.

The automaker said judges do not have the same power as does the NHTSA to order a vehicle recall. Under the deal, the vehicles could be fixed or the cost of previous replacements could come as early as next year, Fazio said.

The automaker already is involved in recalling 6.5 million Bridgestone/Firestone tires -- standard equipment on Ford Explorers -- that are being investigated in connection with more than 100 highway deaths.