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Ford Motor Co. agreed Thursday to reimburse current and former owners for repairs on millions of cars and trucks prone to stall because of a flawed ignition system. The deal approved by a California judge could cost the automaker $2.7 billion, the plaintiffs said. Ford attorney Richard Warmer disputed that estimate, without offering specifics. “This will not be something that will have a material effect on the company’s financial position,” Warmer said. The settlement was approved as the beleaguered automaker weathers a series of setbacks, including a 15 percent erosion in vehicle sales and the costly Firestone tire situation. The settlement ends years of litigation and will pave the way for millions of current and former Ford owners nationwide to be reimbursed for repairs and related expenses, such as towing fees. However, it does nothing to remove from the road the estimated 12 million Fords nationwide equipped with the ignition system originally installed in 20 million vehicles, critics said. These cars and trucks remain prone to stall without warning, according to Ford’s internal documents. “I think it’s as good as they could have possibly gotten, short of a recall,” said Jeff Fazio, the lead attorney suing Ford. Ford has maintained that its ignition devices and vehicles are safe and admitted no wrongdoing in the settlement. Alameda County, Calif., Superior Court Judge Michael E. Ballachey, who said earlier that the automaker was living in an “Alice in Wonderland” dream by denying the ignition modules were defective, signed the settlement Thursday after weeks of closed-door negotiations. “I thought this wasn’t going to happen,” Ballachey said. The out-of-court agreement came two months after The Associated Press reported that at least 11 deaths and 31 injuries were blamed on stalling in Ford vehicles equipped with the ignition device. The AP also obtained internal Ford memos that show the automaker had evidence its ignition design could make engines suddenly fail on the road. Ballachey ruled that Ford knew as early as 1982 that the vehicles were prone to stalling, especially when engines grew hot, and that Ford failed to alert consumers and repeatedly deceived federal regulators by claiming the modules weren’t flawed. A trial was expected to begin later this year and could have exposed Ford to billions of dollars in damages under California consumer laws. The suit challenged Ford’s placement of the thick film ignition (TFI) module, which regulates electric current to the spark plugs. In 29 models for years 1983 through 1995, the module was mounted on the distributor near the engine block, where it was exposed to high temperatures. According to internal documents obtained by the AP, Ford had redesigned the ignition to save as much as $2 per vehicle and to increase fuel economy. One document indicates Ford knew the ignition devices should not be exposed to temperatures above 257 degrees. Another indicates Ford warned its engineers that many engines ran at temperatures higher than this, potentially resulting in “rapid catastrophic failure.” A former National Highway Traffic Safety Administration investigator told the AP that Ford concealed this information from federal safety regulators, who were studying hundreds of complaints about Ford vehicles stalling. Michael B. Brownlee, who oversaw the defects investigations, said the government might not have closed its four investigations if Ford had provided these and other key documents. The government, which decided against a recall years before the memos became known, cannot recall the vehicles now because the legal deadline has elapsed on the aging vehicles, legal experts said. Ballachey ordered Ford last year to recall as many as 2 million vehicles in California after determining that they could stall at high engine temperatures. Ballachey had no jurisdiction over vehicles in other states, but found that the 29 models of cars and trucks were equipped with a design defect. The settlement ends this recall threat and expands the class to Ford vehicles nationwide that have 100,000 miles or less. Ford will reimburse owners who paid or will pay to repair the ignition system if it fails. Consumer groups backed the accord, but were frustrated nevertheless. “If Ford were concerned about public safety, they would have recalled the vehicles,” said Clarence Ditlow, who heads the Center for Automotive Safety. The settlement came a week after Ford reported a third-quarter loss of $692 million. In addition, Standard & Poor’s reduced Ford’s credit rating two notches after the company said it would cut fourth-quarter dividends in half. The federal government has blamed at least 271 deaths on Firestone brand tires that experienced tread separation. Many of those tires were installed as original equipment on Ford Explorer sport utility vehicles, some of which rolled over. Firestone parent company Bridgestone/Firestone Corp. insists the vehicle is partly to blame for the accidents. Ford says it’s entirely a tire problem and last May began a $3 billion program to replace 13 million Firestone tires. In September, Ford recalled nearly 788,000 Windstar minivans because they have faulty parts that could catch fire. All the 1999 and 2000 models being recalled have a wiper motor that can collect moisture and overheat. To cut costs, Ford is eliminating 4,000 to 5,000 white-collar jobs by the end of the year and has reduced auto production. Copyright 2001 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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