It's taken nearly eight years to reach a settlement.
It all began back in 2012 when a class-action lawsuit was filed against Ford on behalf of Ford Focus and Ford Fiesta owners whose vehicles were equipped with the six-speed dual-clutch PowerShift transmission. Internally called DPS6, the transmission has since been accused of being faulty and put into production prematurely despite the fact Ford was aware of unresolved issues. Among them were recurring shudders when pulling away from a stop, hesitation while changing gears, downshifting delays, and, alarmingly in some cases, sudden or delayed acceleration. One Focus owner even claimed he was forced to drive home in reverse because the transmission wouldn't shift into drive.
According to the Detroit Free Press, a proposed settlement has been reached between Ford and owners.
Exact details of the settlement are still coming in, but one lawyer involved in the negotiations on behalf of the owners claims Ford's payout could exceed $100 million. "There's no cap. The truth is, Ford is going to have to pay out claims until they're exhausted," said Tarek Zohdy of Capstone Law in Los Angeles. "In my opinion, Ford will have to deal with these vehicles until people are done filing their claims."
There are nearly 2 million owners and former owners involved in the suit against the automaker. The affected vehicles are the 2011-2016 Fiesta and 2012-2016 Focus models. The proposed agreement is actually an improvement of an earlier version a California appeals court declined to accept last September. Those improvements include:
• A guaranteed commitment from Ford of $30 million in cash reimbursement to consumers who have a record of multiple failed transmission repairs within five years of buying their cars or 60,000 miles
• An easier process for former owners and people who leased the cars to get compensated
• Simplifying a buyback program for defective vehicles
A Ford spokesperson stated late last week that the automaker "believes the settlement is fair and reasonable, and we anticipate it will be approved by the court following the hearing next month." That hearing is scheduled for February 28.
Over the years, Ford attempted to repair the vehicles and later extended some of their warranties. Federal safety regulators were aware of what was happening but found no "unreasonable" safety risk to warrant a recall. Investigations, such as the one conducted by the Detroit Free Press, brought greater attention to the issue and negative publicity for Ford.
Not all owners will receive identical payouts; a formula will dictate an amount based on how many service visits and software updates were necessary, among other criteria. Why did Ford realize it was in its best interest to settle? One lawyer defending the owners argued early last year the automaker faced a potential $4 billion liability without a settlement.