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December 20, 2002

Miller: Ford Motor Co. Will Pay $51.5 Million in Nationwide Settlement

DES MOINES.Iowa Attorney General Tom Miller announced today that 50 states and three jurisdictions have reached a $51.5 million nationwide settlement with The Ford Motor Company that resolves allegations of deceptive trade practices relating to the sales and advertising of Ford Sport Utility Vehicles -- SUVs. As part of the settlement, Ford will fund a $30 million consumer education campaign on SUV risks and safety tips.

The States' investigation - which was led by the Attorney General offices of FL, IA, WA, CT, GA, IL, TN, and TX - focused on allegations that Ford continued to use certain Bridgestone/Firestone tires even after the company knew the tires had an unacceptably high failure rate, and that using the tires made Ford's SUVs more likely to experience dangerous roll-overs. Former Florida Attorney General Bob Butterworth led the investigation prior to his resignation on November 4, 2002. Miller thanked Butterworth for his leadership in this case and in numerous other consumer protection cases over many years of service.

In Iowa, both a Petition and an Agreed Final Judgment or settlement were filed this morning in Polk County District Court in Des Moines. The settlement was approved by the court. Similar filings have occurred all over the country.

The States' principal allegations were that Ford failed to disclose a known safety risk concerning tire failures with certain Firestone ATX and Wilderness AT tires which came equipped on some Ford SUVs; that Ford advertising misled consumers as to the safe use of Ford SUVs; and that certain "aftermarket" or replacement tires sold through Ford's "Around the Wheel" program were represented as the same tires as the tires that came equipped on Ford SUVs when that was not true. Ford denied the allegations.

The states will use $30 million from Ford to mount a nationwide public service consumer education campaign on SUV safety. The remainder will go to the states for their costs of investigation and for litigation and consumer education. The settlement does not include consumer restitution because Ford already has spent approximately $2 billion to replace tires in the 53 jurisdictions (fifty states, plus the District of Columbia, Puerto Rico and US Virgin Islands.)

"I am pleased that Ford stepped forward to resolve these problems in a responsible and professional way," Miller said. "This investigation was focused on issues of fair advertising and consumer safety. Ford's response to our concerns shows the company recognizes the value of consumer education and accepts responsibility for raising consumer awareness about SUV safety. We appreciated the cooperation of Dennis Ross, Ford Vice-President and General Counsel, and his legal staff."

The joint settlement agreement comes a year after the states entered into a $51.5 million nationwide settlement with Bridgestone/Firestone, Inc., related to the advertising and sale of tires that had high rates of tread separations. Bridgestone/Firestone manufactured the tires specifically for use as original equipment on Ford Explorers and Mercury Mountaineers.

The states also alleged that Ford advertising exaggerated the safe loading capacity and maneuverability of Ford SUVs. Despite the fact that the Explorer and other SUVs really are "trucks," built on truck chassis, Ford marketed and advertised the Explorer as being engineered to have "car-like" steering and handling, thus blurring critical distinctions between the Explorer and passenger cars, the states alleged.

Besides providing funding for a national SUV safety campaign, the agreement contains a number of important provisions to enhance consumer safety:

  • The settlement prohibits Ford from making misrepresentations about the cargo capacity, safety and handling characteristics of their SUVs. This includes prohibiting Ford from using the term "car-like" in advertising with respect to the steering and handling of its SUVs.
  • The company must have reliable scientific evidence to substantiate any representations about vehicle safety, performance or durability.
  • Ford must provide safety information about cargo loading and vehicle handling to each consumer who buys a Ford SUV and provide Spanish language owners' guides upon request.

In the agreement, Ford spelled out a number of consumer education initiatives that it will launch in the coming year. Ford also agreed to abide by all state and federal laws governing SUV safety, including a federal regulation that requires manufacturers of SUVs with a wheelbase under 110 inches to alert purchasers that those vehicles have a higher possibility of rollover than other vehicle types. Ford also will advise consumers of steps they can take to reduce the potential for rollover or rollover-related injuries.

Today's announced settlement does not preclude an individual's right to assert legal claims against Ford.

SUV Safety Issues for Consumers

Ford's own advertising, owner's guides, and other materials - and the $30 million consumer education campaign - will emphasize and remind owners that SUVs handle differently from passenger cars. Sport utility vehicles are constructed on the chassis of a truck; they handle differently and require different safety measures and awareness than most cars. Roll-overs can result from SUVs' high center of gravity in some situations.

SUV drivers will be exposed to more safety awareness topics such as the risk of overloading and exceeding payload capacity; risks of improper weight distribution; the special importance of maintaining SUV tires properly and with proper inflation; safe practices for loading roof racks of SUVs; limitations on safe use of SUVs off-road; and the critical differences in handling between SUVs and passenger cars - including the increased rollover risk associated with abrupt maneuvers and excessive speed.

"These are key issues many consumers may not be aware of at all," Miller said. "In some respects, SUVs may be safer than other vehicles for example in certain collisions. But in other respects they pose safety concerns people need to be aware of. Ford will address those issues in its own materials, and the major consumer education campaign provided by this settlement will tackle the subject in a way that will help millions of consumers."

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