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Ford Reaches $51.5 Million Nationwide Settlement

Dec 23, 2002 | Triad Business Journal

North Carolina Attorney General Roy Cooper, along with attorneys general from 52 other states and territories, has announced a $51.5 million nationwide settlement with Ford Motor Co. to resolve allegations that the company misled consumers about the safety of Ford sport utility vehicles.

Cooper and the other attorneys general allege that Ford failed to warn drivers of the risk of tire failure on some Ford SUVs and used deceptive advertising to sell SUVs and tires. The states contend that Ford continued to equip its SUVs with Firestone ATX and Wilderness AT tires even after the company knew that the tires had an unacceptably high failure rate and often caused roll-over accidents.

Ford is also accused of running ads that exaggerate the safe loading capacity and maneuverability of its SUVs and the quality of aftermarket tires sold by its "Around the Wheel" program.

Ford denies the claims but has agreed to pay the states $51.5 million, $30 million of which will go to launch a nationwide consumer education campaign on SUV safety. The balance of the settlement will go to the 53 states and territories, including North Carolina, to cover investigation costs and fund consumer protection efforts.

Prior to the settlement announcement, Ford had already spent close to $2 billion to replace tires in SUVs across the U.S.

Under terms of the agreement, Ford is barred from misrepresenting the safety, handling and cargo capacity of its SUVs as well as the purpose of any recall or recommended inspection. Ford will no longer use the term "car-like" to describe SUV steering and handling in its advertisements and must have reliable scientific evidence to back up claims it makes about vehicle safety, performance or durability. Ford also agrees to give safety information to consumers who buy Ford SUVs and to provide information in Spanish upon request.

In addition, Ford must abide by all state and federal laws governing SUV safety, including a federal regulation that requires manufacturers to tell SUV buyers that vehicles with a wheelbase under 110 inches have a higher possibility of rollover than other vehicle types.

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