Ford Rollovers: Ford Faces Major Legal Costs
May 8, 2001
Ford Motor Company is currently facing personal injury and other lawsuits in which damages could exceed several billion dollars. Ford issued a press release stating that the company is being sued over safety issues, including deaths and injuries related to the Explorer sport utility vehicle.
In Ford's most recent annual report submitted to the Securities and Exchange Commission (SEC), the company revealed that it is facing at least five safety-related lawsuits. The company also admits that other outstanding legal claims exist, although the damages are "unspecified" at this point.
The SEC report did not detail the amount of damages requested in another lawsuit in relation to securities fraud and shareholder derivative actions involving alleged improprieties in Ford's handling of the Firestone tire recall and Explorer rollovers. One particular investor lawsuit claims "that the company's board members breached their fiduciary duties to the company and shareholders by failing to inform themselves adequately regarding Firestone tires." Another lawsuit, a class action filed last year, alleged that Ford was not honest about the safety of Ford products, specifically the Explorer.
The Chief Executive Officer of Ford Motor Company has repeatedly defended the safety of Ford vehicles, including the Explorer. Ford officials have repeatedly stated that rollovers involving the Explorer were due to faulty Firestone tires, not the vehicle itself. The 15-inch ATX, ATX II, and Wilderness AT tires were routinely installed on the Explorers. In an effort to separate itself from Firestone, Ford has attempted to settle all cases out of court as quickly as possible.
Ford Motor Company is also facing lawsuits in conjunction with other models. For example, class action suits in Alabama, California, Illinois, Maryland, Missouri, Tennessee, and Washington allege that Ford intentionally hid a safety defect in the ignition modules of over 22 million 1983-1995 model vehicles. The lawsuits allege that the ignition defect causes vehicles to stall at highway speeds. A settlement was recently reached in the California case in which Ford agreed to fix ignition problems on certain models. The cost to Ford could exceed $1.5 billion. Several deaths and more than 30 serious injuries have been attributed to the faulty ignition system.
Still another lawsuit involves the Ford Bronco II and claims that it has a dangerous propensity to rollover. Damages from this claim could cost the company $2.4 billion. Production of the Bronco II was discontinued in 1996.
Seat belts are also at the root of lawsuits concerning Ford. As of December 31, 2000, plaintiffs were seeking over $603 million for injuries from, or aggravated by, alleged defects in seat belts or other occupant restraint systems.
Ford is also faced with asbestos-related claims and possible charges to clean up "numerous hazardous substance storage, recycling or disposal sites." In addition, the Environmental Protection Agency has begun a civil enforcement action against Ford in relation to a disposal site for industrial waste in Texas.
Finally, Ford might be forced to recall 6 million 1997-1998 model year vehicles that use a system for monitoring fuel vapor leaks if the Environmental Protection Agency determines that the system is faulty.
-- Article Courtesy of InjuryBoard.com
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