Ford Engineers Warned That Explorer Needed Design Revisions. Ford Motor Co. ignored its engineers’ advice that the Explorer sport-utility vehicle needed design revisions to prevent rollover accidents and fatal injuries, according to internal company documents and employee depositions.
In 1993, Ford engineers James Cheng and Jessy Li advised the company to reinforce Explorer roof supports to prevent collapses in rollovers, company records show. Ford didn’t make changes because the U.S. government didn’t require any, Ford engineering supervisor Christopher Brewer said in a 2003 deposition.
In 1999, Ford engineers in Venezuela warned that Explorers were rolling over and had caused at least nine deaths because of flaws in the suspension. Three years earlier, Ford engineers had said in writing that the deficiency could be solved by moving the shock absorbers toward the wheels. Ford didn’t make the change.
Attorneys suing Ford are using these and other documents obtained by Bloomberg News in as many as 500 lawsuits claiming defects in Explorers. Ford’s past emphasis on profit before safety risks future sales, investor Daniel Genter says.
“You have this ongoing theme of corporate decisions made for profit and gain,” says Genter, president of Los Angeles- based RNC Genter Capital Management, which holds about $2 billion of debt, including Ford bonds. “This compromises auto companies that are already struggling.”
More than two dozen trials claiming defects in Explorers are set for this year, the first one starting on Feb. 7, at a time when higher gasoline prices and changing tastes are cutting into Explorer sales for Dearborn, Michigan-based Ford.
Theodore Boutrous, Ford’s appellate attorney, says Ford didn’t do anything wrong in not following the advice of some of its engineers.
“It didn’t mean Ford wasn’t acting in good faith,” said Boutrous. “When talking about safety in the science of engineering, one of the key issues is debate. What you want is different people putting out different ideas.”
These lawsuits are part of the aftershock of the investigations in 2000-2001 into rollovers related to Bridgestone Corp.’s Firestone-brand tire blowouts. The suits are fueled partly by thousands of pages of internal documents the company revealed after the recalls of defective Firestone tires.
While there are claims against other automakers involving rollovers, the public release of these internal documents in court files leaves Ford uniquely vulnerable, says Robert Rabin, a law professor at Stanford Law School in Palo Alto, California.
`Strain on Ford’
“It’s the combination of the revelation of documents, the common importance of these documents to new cases and the networking of lawyers who try these cases,” says Rabin. “This litigation will be a strain on Ford’s resources for a considerable time.”
Explorer sales have been falling since 2003, according to company year-end sales reports. Ford sold 339,333 Explorers in the U.S. in 2004, a 9.1 percent decline from the previous year. The company sold 373,118 Explorers in the U.S. in 2003, down 14 percent from sales in 2002.
The potential liability to Ford by settling or losing the cases at trial is unknown. In 2004, Ford lost two Explorer verdicts totaling about $375 million.
“This could easily cost Ford more than $1 billion by the time all these cases are resolved,” says one plaintiff’s attorney. “They could have spent a lot less to avoid this.”
Ford may end up with negative publicity and reduced sales from losing cases, says Dan Poole, vice president of equity research at National City Corp. in Cleveland, which helps manage $23 billion including Ford shares.
“Sometimes you see eye-popping awards that make headlines,” Poole says. “But one of the effects lawsuits can have is an impact on future sales.”
No Rollover Tests
The Explorer doesn’t roll over more often than any other vehicle in its class based on U.S. government safety statistics, says an attorney, who represents Ford in Explorer trials.
The fatality rate in rollovers was lower for Explorer than for the Chevrolet Blazer, the Jeep Grand Cherokee and Kia Sportage, according to the National Highway Traffic Safety Administration’s Fatality Analysis Reporting System data from 1994 to 2001, cited by Ford in trials.
“The vast majority of injuries and deaths are to people who are not wearing their seat belts,” Thomas says. NHTSA said in June that 63 percent of deaths in SUV accidents in 2003 involved people not wearing seat belts.
An attorney for accident victims in North Little Rock, Arkansas, says Ford didn’t do proper Explorer rollover tests before selling the SUV. Ford’s truck engineering director, Thomas Baughman, said in a December 2000 deposition that Ford stopped live testing of Explorer rollover resistance in the mid-1990s because of an accident during a test drive of a Ranger pickup truck.
In a November 2004 deposition, Ford design engineer William Ballard testified that Ford never intentionally rolled Ford Explorers to see how the seat-belt systems operated in crash conditions. “We don’t do rollover testing as part of a development program,” Ballard said.
Seat belt tests that involve rolling over a vehicle may produce varying results depending on how the vehicle rolled, Thomas says. “Dynamic rollover testing is very unpredictable and not repeatable,” he said.
The attorney says Ford’s decision not to do these tests may hurt the company in court. “They use their customers as crash-test dummies,” he says.
Ford is following standard testing procedures of the U.S. auto industry, says Paul A. Green, senior research scientist at the University of Michigan Transportation Institute in Ann Arbor, Michigan. Auto companies now use computer simulations for much of this testing, he says.
“They do the testing they’re required to do,” says Green, who has published articles on automobile issues in publications of the Society of Automotive Engineers. “But there is the larger principle, what does a good corporate citizen do? Just because it’s not required doesn’t mean you shouldn’t do it. Even if you have a good simulation, you don’t know if it’s right.”
Ford runs a type of rollover resistance maneuver known as the J-turn, abruptly turning the vehicle in the shape of the letter J. Ford has been unable to locate copies of the actual J- turn results without the computer modeling.
Gomez says he doesn’t consider this to be documentation that J-turn tests were run or that the Explorer passed.
Earlier Engineer Advice
Ford has limited some other tests of Explorers involving actual driving conditions, according to a report on a July 1999 test at the Dearborn Proving Grounds. After a test driver in Dearborn rolled a 1999 Explorer while turning on a gravel road, Ford instituted new rules, the report says.
Testing on gravel roads for the Explorer and other SUVs would be limited to “straightaway section only” at speeds not exceeding 35 miles per hour, and test drivers would wear helmets, according to the report.
The decisions by Ford not to improve the Explorer mirror several other steps taken before the first Explorer was sold in 1990, according to Ford internal records and employee depositions given in civil complaints against the company. In 1989, Ford engineers recommended the company widen the vehicle by 2 inches to improve its stability.
Ford didn’t redesign the Explorer because the work would have delayed both the marketing of the vehicle and the company’s return on a $500 million investment in the model, according to a November 2000 deposition by Roger Simpson, Ford’s program manager for the vehicle.
`Stable and Safe’
Ford widened the 4-door Explorer in the 2002 model year, Ford’s Baughman said in his deposition. The company didn’t widen the 2-door version, he said.
The decisions exposed Ford to punitive damage claims, California State Judge Kevin Enright wrote in upholding $75 million in punitive damages of a $369 million award against Ford last year in San Diego. “There is evidence Ford knew of potentially fatal defects during the development and manufacture of the vehicle not addressed by the safety standards and chose not to remedy those problems,” Enright wrote.
The car company’s decisions are similar to marketing choices made by pharmaceutical companies that sell drugs linked in clinical studies to potentially fatal side effects, says Joan Claybrook, president of Public Citizen Inc., a Washington-based consumer lobbying group.
“There is a rush to market for many industries because of strong competitive pressures,” says Claybrook, 67, who was head of the National Highway Traffic Safety Administration from 1977 to 1981.
She says companies are willing to face lawsuits because profit outpaces legal costs. “Many companies view this as a cost of doing business,” Claybrook says.
In the Explorer’s first three years on the market, profit from the sport-utility vehicle exceeded that of the rest of the company.
From 1990 to 1992, Ford reported combined losses of $8.8 billion. During those years, the company had net income of $2.5 billion on Explorer sales in the U.S. and Canada, according to a 2002 deposition by Ronald Ross Johnson, a financial analyst at Ford.
From 1993 to 1997, Ford had $23.3 billion in net income. “The Explorer helped to engineer a lot of their turnaround,” RNC’s Genter says.
From 1990 to 1997, Ford had about $13.4 billion in net income on the Explorer, Johnson testified. Ford doesn’t disclose current profit figures on the Explorer, says Marcey Evans, a Ford spokeswoman.
Starting in 2000, the reputation of the Explorer, the best- selling SUV, was hurt by a federal investigation into at least 271 highway deaths involving tread separation by Firestone tires, mostly on Explorers.
Ford has settled an undisclosed number of lawsuits, with more than 100 of these tread separation cases still pending, according to Michelle Imel, a courtroom deputy in the federal district court in Indianapolis, where these lawsuits against Ford and Firestone were consolidated.
Ford Trial Losses
None of the tread-separation complaints against Ford resulted in a jury verdict. Ford won’t comment on the number or cost of settlements.
Attorneys for accident victims are using depositions and documents from those lawsuits against Ford alone, in Explorer rollover cases that have no tire failures or in cases that involve blowouts of tires by other manufacturers.
In 2004, Ford lost two Explorer rollover cases at trial, including the $369 million verdict in San Diego in June, later reduced by the trial judge to $150 million, and a $5.3 million verdict in Fort Myers, Florida, in August. Ford appealed the San Diego verdict after the trial judge turned down the company’s request for reversal. Ford settled the Fort Myers case.
Many of the pending rollover lawsuits don’t focus entirely on stability claims. They make allegations that Explorers have suspension, roof or seat-belt defects, as well.
Roof-crush claims were the key elements in the San Diego verdict, says Dennis Schoville, an attorney who represented accident victim Benetta Buell-Wilson.
Buell-Wilson, 49, lost control of her 1997 Explorer when she swerved to avoid an obstruction. The vehicle rolled over 4 1/2 times, and the roof collapsed on her, her attorney says.
“Her back just snapped,” leaving her paralyzed from the waist down, says Schoville, a partner at San Diego-based Schoville & Arnell LLP.
Before the January 2002 accident, Buell-Wilson, a married mother of two, was a volunteer for the San Diego school system and was studying to become a teacher.
Ford said at trial the force of the accident caused her injury and that roof crush doesn’t cause injuries in rollovers.
Buell-Wilson’s attorneys used the 1993 Cheng and Li internal engineering memo against Ford. The jury awarded Buell-Wilson and her husband $122.6 million in actual damages, and added $246 million in punitive damages.
Explorer Roof Memo
The memo by the Ford engineers, written while Ford was considering changes for the 1995 model Explorer, said an Explorer roof can buckle when the windshield breaks. It recommended improvements in roof strength.
Cheng and Li, in their report written to engineering supervisor Brewer, suggested reinforcing the B-pillar and changing A-pillar material from “cold roll steel to high strength steel” to improve roof crush performance. The A pillar is near the windshield, holding up the roof of a vehicle. The B pillar, which also holds up the roof, is adjacent to the front seats.
Brewer testified in a January 2003 deposition that Ford didn’t make the changes in the 1995 Explorer because the roof met federal regulatory standards. He also testified the modifications would have improved the safety of the Explorer.
The B pillar was bolstered in early 1996, Brewer said in his deposition. In May 1996, Ford engineers listed “roof crush” as a safety weakness of the then-current Explorer, according to an internal Explorer “design review” document attorneys will be submitting as part of a New Jersey lawsuit that goes to trial this month.
Federal Standards Insufficient
The A pillar was never bolstered, says Turner, who is using the Cheng/Li memo in the lawsuit going to trial this month in New Jersey. Turner represents accident victims in 47 lawsuits.
When the Explorer was first planned, company engineers warned in 1987 that federal standards were insufficient and rollovers would require greater roof strength.
“Fatalities in rollover accidents, which may or may not be accompanied by roof crush or occupant ejections, are more prevalent in light trucks than cars,” wrote Ford’s engineers in July 1987, in a document titled “Light Truck Safety Design Guideline Strategy.” The Explorer is designated a light truck.
In the 2003 deposition, a lawyer was representing a quadriplegic accident victim. McClellan asked Brewer if Ford should have considered making the changes recommended by Cheng and Li.
“We chose, based on the test results that we had, to recommend that we should do some kind of reinforcement like this between a 1995 and 1998 time frame,” Brewer said in his deposition.
“Every change that we make takes some amount of time to do, some amount of testing to do, and costs some amount of money, right?” Brewer responded.
Some attorneys for accident victims contend there are defects in the Explorer seat belt.
The seat belt can spool out during a rollover, leaving an accident victim hanging out of the vehicle, while the belt is still buckled.
In 1996 and 1997, the Society of Automotive Engineers published two papers on seat-belt failures in rollovers, along with proposed solutions. One paper cited a spool-out in an Explorer rollover.
In lawsuits over roof crush, Ford has argued that the occupants, even those wearing seat belts, hit the roof during the rollover, before the roof collapses. Attorneys for accident victims contend that this is evidence of a failure of the seat belts to restrain people.
Pretensioners, devices using sensors to detect rapid decelerations can “fire milliseconds before impact and pin you into the seat,” Medina says.
The devices were provided on the Ford Mondeo in Europe in 1993, according to a November 2004 deposition of Ford’s Ballard. They weren’t offered on Ford vehicles in North America until 1997, he said.
Pretensioners with sensors to detect potential rollovers were offered as optional equipment as part of the side curtain air bag system in all 4-door Explorers in March 2002, says Glenn Ray, a Ford spokesman. Ford won’t disclose when the company would make such equipment standard, he says.
Other cases are focusing on the claim that the Explorer’s suspension allows the back end of the vehicle to “skate” sideways when there is a vibration in the rear, caused by a rough road, a tread separation or by the wheels going over rumble strips used on highways to slow down cars or to alert drivers.
In August, the first of the suspension cases went to trial, with a Fort Myers jury finding against Ford in a claim brought by the family of Bob Miller, 57, who was killed in an Explorer rollover.
Miller, the safety director for a construction company, was traveling on Interstate 75 outside Fort Myers when he lost control of the Explorer after a non-Firestone tire blew.
The jury awarded $5.3 million in compensatory damages and was considering the family’s request for $48 million in punitive damages when Ford settled the lawsuit for a confidential amount.
During the trial, Miller family attorneys brought in documents from a 1999 study by Ford’s Venezuela unit. It concluded that the Explorer’s shock absorber design was “too soft” and the vehicle’s high center of gravity made it more susceptible “to rollover during hard shift,” or on rough roads.
The Miller attorneys also brought in a July 1998 Ford engineer’s evaluation of an Explorer that had experienced “slippage/loss of control during rough road/off road.” The evaluator said: “This is typical `skate.’ Suspension design changes would be required.”
Previously, in 1996, three Ford engineers had warned that the shock absorbers should be moved to prevent skate.
In an article published by the Society of Automotive Engineers, Kenneth Kramer, William Janitor and Lawrence Bradley, were writing about the suspension used on Ford light trucks, including the F-150 series, the Ranger and the Explorer.
`Out of Control’
The Ford engineers said that “skate” occurred most often when “vehicles are driven aggressively on rough, winding roads.” They added that “skate” could also occur “with single wheel events or potholes.”
The engineers advised that shock absorbers should be moved outward toward the wheels.
The Venezuela engineers were describing events that occurred only at high speeds on rough roads, Thomas says. “People were driving 100 miles per hour and hitting depressions in the road,” he says. “This is not a safety issue unless people are driving completely out of control.”
The company solved the skate problem in the 2002 4-door Explorer by changing to an independent rear suspension, says Denney. Ford didn’t change the suspension in the 2002 2-door, Baughman said in his deposition. Ford says the 2-door Explorer was discontinued after the 2003 model year.
The second trial on the skate allegations is scheduled for April in Miami. It involves the death of Lance Hall, 18, who was a passenger in a 1996 Explorer. Hall’s family says the Explorer went into skate after driving over a rumble strip.
Ford said in November it would add a rollover protection system to the 2005 Explorers. Ford made changes in the 2002 4- door Explorer that made it “inherently less prone to rollover,” Ford’s Baughman testified in 2000.