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Ford Offers to Settle
Ignition Class Action

August 15, 2001
After years of stonewalling, Ford is trying to settle a California class action charging that as many as 5 million Ford vehicles have faulty ignition switches that can cause stalling and other problems.

Ford's last-minute settlement offer came just hours before trial proceedings were to open before Alameda County Superior Court Judge Michael E. Ballachey. It's seen as an overdue attempt by Ford to clean up its image and minimize losses after a rash of safety and quality embarrassments.

A statement that appeared briefly on Ford's Web site said the company would agree to extend the warranties from 50,000 to 100,000 miles on a number of models with distributor-mounted ignition modules going back to the 1984 model year. But later both sides said that no final proposal had been made.

The cost of the proposed settlement was estimated at $750 million to as much as $1 billion. If the case had gone to trial, a jury could have slapped Ford with damages running into the billions of dollars.

Judge Ballachey had earlier remarked that Ford was living in an "Alice in Wonderland" dreamland for denying that the ignition switches on about 23 million vehicles were defective. In a highly unusual move, the judge earlier ordered up to 2 million California vehicles recalled so the ignitions could be replaced.

The National Highway Traffic Safety Administration (NHTSA) conducted three separate investigations of the problem in the 1980s but did not order a nationwide recall.

Ford is reeling from a series of safety and quality crises, including the catastrophic failure of its 3.8-liter V6 in 1990s-era Windstars and other models, the recall of 6.5 million Firestone tires on Ford Explorers and lingering questions about the safety of the Explorer.

Other recent problems have included numerous recalls of new models, including the Focus, the Escape SUV and the 2002 Explorer.

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