Ford Provides Good Example of How NOT to Handle a Recall

August 13, 2013 | Charles Bowen

untitledThe National Highway Traffic Safety Administration (NHTSA) and Ford jointly announced that the automaker would be forking over a record-setting $17.4 million fine relating to the botched recall of its Escape compact SUV. The settlement is meant to put an end to the current NHTSA investigation of Ford’s handling of the recall; actions that some consumer advocates say were illegal. The trouble began when Ford announced last summer that it would recall nearly 500,000 Escape SUVs built between 2001 and 2004 due to sudden acceleration issues. Specifically, problems with the cruise control system that could cause the throttles to stick were identified as the source of the trouble.

Ford’s decision to issue a recall was certainly a good one and in most instances would be seen as a positive step by a car company to take responsibility for its potentially defective products. So then what was the problem? Ford’s recall came about seven years too late according to consumer safety experts. According to the Center for Auto Safety, the trouble in this case actually began back in 2005 when Ford initially recalled 470,000 Escapes made between 2002 and 2004. The initial issue concerned an accelerator cable that could get caught on the gas pedal and prevent the engine from idling. The Center says that this recall may actually have created another equally dangerous problem. According to the Center, the recommended repairs caused damage to the vehicle’s cruise control cable, which could then lead to unintended acceleration problems. The Center says that Ford knew about the problem early on and says that several memos sent to Ford dealers at the time of the recall indicate that it was concerned about damage inflicted on cruise control cables as a result of the repairs.

Unfortunately, rather than issue a second recall, Ford waited nearly seven years. Indeed, they only issued last year’s recall after the NHTSA opened an investigation into reports that the cruise control issue had led to at least one death. Ford’s delay was not only a bad decision in terms of protecting its customers’ safety, but it may also have been illegal. Federal law requires automakers to notify the NHTSA within five business days of any safety-related vehicle defect. While the Center for Auto Safety says Ford may have known about the trouble back in 2005, the NHTSA’s investigation turned up evidence that showed Ford knew of the safety issue by May of 2011 at the latest, a full 16 months before it officially recalled the dangerous vehicles.

Rather than continue its case against Ford, the NHTSA agreed to settle for the hefty $17.35 million fine. Though the NHTSA said that the recall was “untimely,” Ford refused to officially admit fault in its handling of the Escape recall. Though Ford may have escaped an enforcement action by the NHTSA, it’s not clear that it has escaped all legal liability associated with the SUVs sudden acceleration issues. According to the Center for Auto Safety, at the time Ford issued its recall in August 2012, the NHTSA had already received 68 complaints about the problem including 13 car accidents, nine injuries and one death tied to the issue.