Ford to Settle Ignition Systems Lawsuit
JOIE CHEN, CNN ANCHOR: It is an extraordinary deal, one that could cost the Ford Motor Company up to $1 billion. Now, here's what's involved. Ford has decided to settle a lawsuit that contends Ford's ignition systems cause cars and trucks to stall and thus potentially cause accidents. Ford denies that there's anything wrong.</s>DAVID WELCH, "BUSINESS WEEK": Well, basically, what it is it's a transistor on -- that goes from the ignition to the spark plug wires, and Ford first recalled them in 1987 because there were some problems with it, particularly on four-cylinder engines. The cars would simply stall out and not start again, and they recalled a number of them, at least a million cars back then. And what the lawsuit did after that was, you know, seek to expand it to well beyond that number, basically nearly every Ford vehicle made from 1985 to 1993, I believe.</s>CHEN: I mean, Holy Toledo, David, that sounds like a lot? 5 1/2 million cars potentially, a billion dollars. That sounds like this was a huge deal! Is it?</s>WELCH: Absolutely. Well, Ford is now saying that they don't think the recall would cost -- court-ordered recall, I should say, would cost them up to a billion. They're saying that's overblown. That's quite possibly true, because, you know, a lot of these -- a lot of the cars in question, you know, were already recalled with the first recall. So they may not have a bad ignition switch on them.</s>CHEN: So if I have one of these cars that fouls up -- and there's a whole list, I suppose you'll probably see it in your newspaper by tomorrow morning -- but if I have one of the cars that are potentially on this list, am I supposed to do something as a result of this? Should I be afraid to drive my car? I mean, what does this mean exactly?</s>WELCH: Well, the settlement hasn't been signed yet. At this point, it's just a proposal. If the judge does approve the settlement, what it means is Ford has to extend the warranty on all of these vehicles from 50,000 miles to 100,000 miles. And a Ford spokesperson I talked to today said only if the car has stalled out because the part fails will they replace it. So if you haven't had a problem with it and you own a Ford vehicle and you take it to the dealer, you -- you know, the dealer may want to keep you happy and replace it. But he may say, if you haven't had a problem, I'm not going to replace it. And as far as the terms of the agreement are now he doesn't have to.</s>CHEN: And that is the understanding we need to have about this. David Welch reports for "Business Week." We appreciate your being with us today, David.</s>WELCH: Thank you, Joie.