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Ford To Pay States $51.5 Million In SUV Settlement

Dec 21, 2002 | Sacramento Bee

California will receive $300,000 from a $51.5 million nationwide settlement with Ford Motor Co. in connection with rollovers of the automaker's Explorer sport-utility vehicle.
Part of the settlement includes a campaign to promote SUV safety.

State Attorney General Bill Lockyer announced the settlement Friday along with attorneys general from the 49 other states, the District of Columbia, Puerto Rico and the Virgin Islands. The settlement does not preclude suits being filed against Ford by individuals.

Explorer rollovers led to a government investigation of accidents involving Explorers equipped with Bridgestone/Firestone tires.

Bridgestone/Firestone paid $41.5 million in a settlement reached last year to head off lawsuits by states over defective tires. Also, the Explorer was redesigned last year.

The state attorneys general claimed that Ford's advertising failed to disclose rollover risks involved with driving SUVs. As part of Friday's settlement, Ford agreed to put warning disclaimers in its ads and to share information with the government on safety developments.

The jurisdictions will use $30 million from the settlement to mount a national public service campaign on SUV safety. Another $15.9 million will be split among the jurisdictions $300,000 and $5.6 million will be used to pay investigation costs.

Ford released a statement saying it "was pleased to work with the states" in the settlement, adding that "states' concerns related mostly to marketing practices with respect to advertising SUVs and tires, which are not unique to Ford."

Len Brewster, a Detroit-based auto analyst, said the settlement was "comparatively affordable for Ford, given the millions that have been spent in similar cases involving things like tobacco."

Shares in Ford closed at $9.79 Friday, up 1 cent, on the New York Stock Exchange.

Tom Dresslar, spokesman for the state Attorney General's Office, noted that "the families whose lives were harmed still retain the ability to seek justice against Ford and get full compensation for the economic and non-economic damages that they suffered."

He said the states' legal action was intended to ensure that Ford takes adequate steps to promote SUV safety and is truthful in its advertising.

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