The Washington Post
Ford Motor Co. said Monday it has reached a proposed settlement of a California court lawsuit that could cost the automaker as much as $1 billion to replace an ignition module that could cause millions of vehicles to stall unexpectedly.
The agreement, which was reached late Sunday, must still be approved by California Superior Court Judge Michale Ballachey who four months ago ordered the recall of almost 2 million Ford vehicles in the state. The settlement came in the early stages of a trial to set damages in the class-action case.
The settlement is not a recall. If it were, it would be one of the biggest auto recalls in U.S. history. More than 300 Ford models built between 1983 and 1995 were equipped with the ignition switch in question, and plaintiffs’ attorneys estimate there may be as many as 5 million still on the road and put the cost of the settlement at between $750 million and $1 billion.
Ford said the settlement agreement would be presented to the court today, but that it did not know when or how Ballachey might rule. Ford has said it would appeal the judge’s recall order on grounds he had no legal right to do so.
Ford, in a statement released from its headquarters in Dearborn, Mich., questioned the cost estimates as "substantially overstated." The company did not say how much it thought the settlement might cost.
Under the terms of the settlement, Ford will replace the ignition switches on all 1983 through 1995 vehicles with less than 100,000 miles. The ignition module regulates electrical current to the engine’s spark plugs. The suit claimed that Ford mounted the module on the distributor too close to the engine block exposing it to excessive heat. The high heat, according to the suit, has caused some modules to fail which in turn causes the engine to stall while the car is being driven.
The company maintains there was not problem with the original equipment models.
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