Ford settles Explorer suits

Deal puts to rest all outstanding litigation stemming from Firestone tire scandal that dealt blow to image.

Thursday, November 29, 2007

Bryce G. Hoffman / The Detroit News

Ford Motor Co. agreed Wednesday to settle a series of class-action lawsuits filed by customers who claim its Explorer sport utility vehicles were prone to rollover accidents.

The deal, which applies to about 1 million people in four states, settles all of the outstanding lawsuits stemming from the Firestone tire scandal that dealt a massive blow to Ford’s image earlier this decade.

Under the terms of the settlement, owners of 1991 through 2001 Ford Explorers in California, Connecticut, Illinois and Texas will be able to apply for $500 vouchers to buy new Explorers or $300 vouchers to buy other Ford, Mercury or Lincoln products, according to people familiar with the deal. Ford will also be required to distribute information about the rollover dangers posed by SUVs and limit safety claims in its advertising.

Although Ford has not disclosed how much it paid to settle previous claims, sources said this is far less than the automaker has had to pay to resolve other safety litigation. The automaker would not discuss the terms of the deal, but confirmed that a settlement was filed in Sacramento County Superior Court in California.

"We believe the agreement is fair and reasonable and is in the best interest of our customers," said Ford spokeswoman Kristen Kinley, who added that automakers settle most of the safety lawsuits filed against them and stressed that such moves are not an admission of guilt. "It is very common, and not just for Ford."

Kevin Roddy, a New Jersey attorney and co-counsel for the SUV owners who brought the lawsuit, said consumers will be able to apply for the vouchers through a Web site starting Monday if a judge in Sacramento gives preliminary approval to the settlement.

The parties plan to ask Superior Court Judge David De Alba to give final approval during a hearing in April, after those covered by the settlement have had time to apply for the vouchers, Roddy said.

If the judge approves the preliminary settlement, the parties will announce a toll-free number and Web site for consumers, followed by the mailed notices to Explorer owners.

The vouchers can be used not only by plaintiffs’ family members, but also by anyone in the vehicle owner’s state, Roddy said. "You can give it to your neighbor if he’s in the market," he said.

The lawsuits were filed in the wake of a 2000 federal investigation that was launched after more than 250 people were killed and hundreds more injured in accidents involving tread separation on tires produced by Bridgestone/Firestone Inc. Most of those accidents involved Ford Explorers.

The two companies blamed each other for the accidents. Ford accused the tire manufacturer of producing shoddy products; it said the design of the Explorer was the real reason for the rollovers.

In 2002, the National Highway Traffic Safety Administration cleared the Explorer after it found the vehicle no more rollover-prone than other SUVs.

Even so, the number of lawsuits exploded during the controversy. Ford won’t disclose how many lawsuits it has been forced to defend because of defect allegations leveled against the Explorer, the best-selling sport utility vehicle in automotive history.

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