San Diego

Transmission Trouble: Ford Accused of Fraud, Heading to Trial in San Diego

Trial set to begin at end of the month

Costly litigation that could put American giant Ford Motor Company $4 billion in the hole is heading to a San Diego courtroom.

There, jurors will decide whether America’s oldest carmaker committed fraud by selling millions of Ford Fiesta and Focus models from 2011 to 2016 which the company knew had troublesome transmissions. Customers claim the dual-clutch transmissions would shudder and jerk while driving.

As time progressed the problem would worsen and some Focus and Fiesta owners would have no acceleration, even in the middle of driving. And after reading through company emails, released as part of several ongoing lawsuits, NBC 7 Responds learned that Ford Motor Company knew the extent of the problems as early as 2011 but did not issue a recall.

NBC 7 Responds first learned about the problem earlier this year when a North Park musician, Eric Koonze, asked for help in getting Ford to resolve the problems he was having with his car. After reaching out, Ford agreed to pay Koonze $24,000 to buy back his car in addition to reimbursing him for registration fees that he paid while he owned the car.

But it turned out the transmission issue Koonze experienced was not a rare occurrence.

“They would call it ‘shutter’, they even have a name for it because they knew it.”

Koonze said ‘Shutter’ was the perfect way to describe the problem he had with his 2014 Ford Focus. “Ju-ju-ju,” was how Koonze described the sound to NBC 7 Responds in February of this year. He repeatedly took the car in for repairs and was repeatedly told the car was fixed when it wasn’t.

Meanwhile, NBC 7 Responds found Ford owners across the country experiencing the same exact problem.

In 2014, a shocking YouTube video posted by Dallas, Texas resident Matthew Garza shows Garza’s wife driving their 2012 Ford Focus down a busy highway when the car’s dashboard lights begin to flash and the car loses all power.

“It’s completely shut off, no power,” Garza says while his wife starts to panic. The couple’s infant daughter was sleeping in the back seat.

Luckily, the couple was able to pull off the highway and into a shopping center parking lot.

Watch the video below.

While some Ford owners have turned to media outlets for help, and others to social media, thousands of car owners went to attorneys.

Just last year, a jury in Los Angeles awarded one Ford owner $554,000 in punitive damages against Ford for fraudulently selling a Ford Focus with the DPS transmission despite knowing the transmission was unfixable.

When asked in July 2018, “Did Ford Motor Company engage in conduct with malice, oppression, or fraud?” a Los Angeles jury answered “Yes.”

“Did Ford Motor Company know that the representation was false, or did it make the representation recklessly and without regard for its truth?” Was another question to jurors, to which they replied, “Yes.”

Ford is now appealing the verdict.

Meanwhile, a jury in San Diego will be asked those very same questions.

The same attorneys who represented the Ford owner in Los Angeles will appear in San Diego Superior Court to argue that Ford acted fraudulently in selling a Focus to their client, North County resident Vanessa Martinez.

According to attorneys handling the multidistrict litigation, Ford Motor Company is facing nearly 13,000 lawsuits over the faulty transmissions.

Information as to what Ford knew and when they knew it has been released as a result of the litigation and obtained by NBC 7 Responds. Attorneys for the plaintiffs estimate the company could be on the hook for $4 billion in payouts because of the troublesome transmissions.

“The transmission, in essence, cannot be repaired,” said attorney William McGee, who specializes in Lemon Law cases and has sued Ford over 500 times on behalf of clients whose transmission failed in their Focus of Fiesta models. “Over the years Ford has come out with a band-aid repair that masks the problems for a while. Our experience shows, however, that this transmission will inevitably fail.”

According to court documents reviewed by NBC 7 Responds, internal emails show Ford was aware of the DPS transmission problems as far back as 2011.

“I'm not sure you now want to tell people that this is a manual transmission considering Ford sold it as an auto transmission, I've got to believe this could be used against Ford in a lawsuit,” wrote a DPS transmission engineer to colleagues in a May 2011 email released as a court exhibit.

An excerpt from court filings in the multi-district litigation against Ford Motor Company.

Then in September 2011, a longtime Ford sales manager wrote to headquarters, “I think if Ford doesn't do something quick, there will be a revolt. Owners are so mad they are bad mouthing the product something furious. Also, some of them think there is a serious safety issue with the transmission and plan to contact the appropriate government authority to demand a recall.”

Court documents also show that as far back as 2014, Ford estimated that fixing the seals alone on the transmissions would cost $650 million. That same year, Getrag, the German company that designed and manufactured the DPS transmission with Ford, agreed to pay the carmaker a total of $300 million over the course of ten years to settle any and all claims about the problematic transmissions, according to the Detroit Free Press.

A spokesperson for Ford said the company does not comment on pending litigation.

However, the spokesperson added that Ford quickly corrected the problem with earlier Focus and Fiesta models.

“Vehicles with the DPS6 transmission built since the second half of 2015 – and previous models with important updates – perform well and have competitive levels of customer satisfaction. We acknowledged a long time ago that there were customer-experience and quality issues with the transmission early in its history after it was on the road.”

“Ford people and dealers worked hard to address the problems: improving and repairing key components, refining the transmission’s performance, and upgrading and installing enhanced software. Resolving the issues took longer than we expected, which we regret. Along the way, we extended warranties for hundreds of thousands of customers, most recently in mid-August, including reimbursing them for covered services. Throughout, Ford vehicles with DPS6 transmissions were and remain safe to drive.”

In previous statements, Ford Motor Company has said it will extend warranty coverage for specific transmission hardware on certain Focus and Fiesta vehicles by two years — now to seven years or 100,000 miles (previously it was five years or 60,000 miles).

This warranty extension applies to the following vehicles:

2014-16 Focus models built from July 4, 2013, to Nov. 5, 2015

2014-15 Fiesta models built from July 4, 2013, to Oct. 15, 2014

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