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Settlement Sets Limits on Ford's SUV Ads

Dec 21, 2002 | Seattle Times

Among the most significant aspects of a $51.5 million deal between the 50 states and Ford to settle the Explorer rollover cases is the impact it should have on SUV advertising throughout the industry, Washington Attorney General Christine Gregoire said yesterday.

Such ads have traditionally featured drivers climbing into their sport-utility vehicles, going up mountains and screaming around corners. Very briefly, at the bottom of the screen, a notice in small type says the demonstration involved a professional driver and took place on a closed course.

Effective early next year, such ads either will stop or the disclaimers will become much more conspicuous under terms of a consent decree filed in King County Superior Court yesterday. Similar documents were filed in state courts throughout the country as the nation's attorneys general reached agreement with Ford, manufacturer of the popular Explorer SUVs linked to rollover accidents involving 271 deaths and 700 injuries worldwide.

The lion's share of the settlement $30 million is dedicated to a national consumer-education campaign to advise drivers about SUV driving and loading. The campaign will focus on all SUVs, not just those made by Ford.

Washington state, which Gregoire said took a lead role in the negotiations, will receive $900,000. Of that, $600,000 will reimburse the state for its attorney fees and costs; $100,000 will be used to continue the state's tire-safety public-education campaign; and $200,000 will go to the state general fund.

The settlement comes a year after the states reached a similar $51.5 million settlement with Bridgestone/Firestone, maker of tires installed as original equipment on the Ford Explorer. Through recalls, buyback programs and lawsuits, Bridgestone/Firestone and Ford are expected to pay out about $5 billion.

Yesterday, a complaint filed alongside the consent decree alleged Ford knew or should have known as early as 1990 that Explorers equipped with ATX and Wilderness AT tires were experiencing increased levels of tire failure due to tread separation. The failures were occurring primarily in warmer climates, and no deaths were linked to them in Washington, though 96 tire complaints were logged in the state during the '90s, Gregoire said.

Ford admitted no wrongdoing under the settlement. In a prepared statement, the company said its "advertising has always been held to the highest standards, particularly as it relates to showing the performance of our vehicles. Our existing practices, combined with new industry-leading practices, will help ensure that our SUV advertising will never be misconstrued."

Gregoire's complaint alleged that Ford has sold more than 5 million Explorers in the United States and that many are on the road and on the "secondary" market as used vehicles young drivers buy.

The company did a major remodel for the 2002 model year, when it widened the track and switched to independent rear suspension.

Gregoire and Assistant Attorney General Doug Walsh said the Ford deal puts the rest of the industry on notice that the states will be monitoring all SUV advertising strategies.

Ford is not the only company that has blurred the distinction between the handling characteristics of SUVs and cars, they said.

Walsh said the marketing and legal departments of other manufacturers will be "scrambling" to review the settlement documents, with an eye toward their own liability if they persist in misrepresenting the limits of SUVs.

In addition to the safety-campaign provisions, the settlement:

• Prohibits Ford from making misrepresentations about SUV cargo capacity, safety and handling characteristics or the purpose of any recall or recommended inspection. This includes prohibiting Ford from using the term "carlike" in advertising with respect to the steering and handling of SUVs.

• Requires the company to use reliable, scientific evidence to back up claims related to vehicle safety, performance or durability.

• Requires the company to provide safety information about cargo loading and vehicle handling to each consumer who buys a Ford SUV.

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