The Truth About Cars » lawsuit The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 27 Jul 2014 14:03:49 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » lawsuit Lawsuit Settlement Highlights Incentive Pitfalls Thu, 08 May 2014 11:00:36 +0000 Hyundai_Motor_Manufacturing_Alabama_Highsmith_01

A long-running lawsuit over the value of the land on which Hyundai’s Montgomery, Alabama plant is located has been settled. The Montgomery Industrial Development Board will pay former landowners $3.45 million to settle their claims. The particulars of the case illustrate the potential hazards faced by advocacy groups when they attempt to incentivize industrial development.

According to the story in the Montgomery Advertiser, the nearly decade-long lawsuit came to a head last November, when a jury awarded the plaintiffs $4.87 million in damages. The plaintiffs are a group of landowners whose acres were purchased by the Industrial Development Board (IDB) for the development of the Hyundai plant. The IDB is a quasi-public body whose members are appointed by the Montgomery City Council. In Alabama, these development boards are the bodies through which industrial incentive money is typically disbursed.

The landowners initially agreed to accept a price of $4,500 an acre for their land after negotiations with the IDB. This price was structured as part of an “option” deal: the land would only be purchased if it was found to be absolutely necessary to construct the plant. A conflict arose when a lone holdout, realizing the value of their position, negotiated a price of $12,000 an acre. This triggered a lawsuit by the other landowners, who had a clause in their contracts forbidding any one owner to receive more compensation than another. After a lengthy procession through the courts, the IDB has agreed to a settlement rather than prolonging the case. It’s still unclear where the money to pay for the settlement will come from. The Board’s website lists land sales, member fees, and certificates of deposit as some of the ways that it raises revenue; it’s also empowered to issue bonds, under the terms of state law.

There’s no question that Hyundai’s arrival has been a major boon to Montgomery, and to Alabama in general. The state and local government incentives offered to the company were instrumental in getting the new plant built. Even so, this lawsuit attests to the fact that incentive packages often carry hidden costs, especially in the legal arena. Caught between the promises made to Hyundai and the need to fairly compensate landowners, the Board got stuck in a bad negotiating position. Now it will have to cough up much more money than originally planned.

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Tesla Fires Back Against Accusations Brought By Lemon Law King Fri, 11 Apr 2014 11:30:03 +0000 tesla-model-s-11

Tesla has fired back against the accusations brought in a lawsuit filed against the company earlier this week by a Wisconsin attorney and self-described “Lemon law King” Vince Megna. Mr. Megna’s client, a physician who took delivery of his Model S in March of last year, alleges that he has had repeated problems with the car’s doors and main fuse and that repeated attempts to remedy the problem have met with no success. He is asking that, after four attempts at resolving the issues, the company re-purchase the car under Wisconsin lemon laws intended to protect buyers if a product is faulty and cannot be repaired by the manufacturer.

Tesla’s response, published on their official blog and attributed to “The Tesla Motors Team,” claims factual inaccuracies in the attorney’s statements. The company writes that, although the customer filed an official buy-back request in November 2013, they have continued to work him to resolve his issues, many of which have “elusive” origins. They go on to say that their technicians were unable to replicate customer’s main complaints, problems with the door handles and the car’s main fuse, and that after replacing several of the parts in question without alleviating the situation they began to suspect the car was being tampered with. They noted that all the issues with the main fuse came shortly after the car’s front trunk, which gives access to the fuse, was opened and claim that the part has performed flawlessly since technicians applied a tamper-proof seal to the switch.

Tesla concludes their response by noting that the attorney in question also filed a Lemon Law suit against Volvo in February 2013 on behalf of the same customer and encourages the public to be aware of how opportunistic lawyers can take advantage of lemon laws.

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Ferdinand Piech & Wolfgang Porsche Sued Over Failed VW Bid Mon, 03 Feb 2014 10:30:05 +0000 Photo: DPA

Photo: DPA

Porsche Automobil Holding SE’s supervisory board members and cousins Ferdinand Piech and Wolfgang Porsche are being sued by seven hedge funds that are seeking 1.8 billion euros ($2.4 billion) in compensation over damages they claim to have suffered as a result of the Porsche holding group’s failed 2008 attempt to purchase the Volkswagen Group.


According to Bloomberg, the civil action was brought in Frankfurt Regional Court, Porsche SE said in a statement released over the weekend. Piech is chairman of the VW Group and Wolfgang Porsche is the chairman of Porsche SE’s supervisory board. The company said it will contest the suit, saying that it is without merit.

The is the latest legal action to face Porsche since disclosing in October 2008 that it had acquired 74.1 percent of Volkswagen, partly through options, and was looking to purchase the entire company. That announcement caused VW stock to rise in price as short sellers scooped up shares to repay borrowed stock bought as a bet that VW would fall.

The takeover attempt failed and Volkswagen now controls the Porsche brand. So far Porsche SE has been successful in defending against accusations that it manipulated Volkswagen shares. The company successfully move most related U.S. litigation Germany where it will get a more sympathetic hearing. In July 2013, the company also won a ruling in an effort to block a new legal claim in the U.K.

While Porsche statement didn’t name the hedge fund plaintiffs, the German magazine Spiegel has reported that Elliott Associates LP was one of the firms that filed the lawsuit.

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$2.7 Billion Lawsuit Against Porsche Goes To Court Wed, 19 Jun 2013 12:58:08 +0000

After a court in Braunschweig, Germany, dismissed two investor lawsuits against Porsche SE, it didn’t take the third one either. Instead, it delegated a lawsuit that seeks $2.7 billion in damages to a Hanover-based court that specializes in cartel matters, Reuters says. Finally, a decision after a hedge fund’s heart.

According to the wire service, “the decision to assign the case to a specialist court may boost plaintiffs’ hopes of getting a hearing from judges more familiar with the technicalities of financial markets.”

The suit is about the big March 2008 short squeeze that happened when Porsche said it owned nearly 75 percent of VW in shares and options. The leveraged buyout was badly timed: A few months later, all credit evaporated. Volkswagen ended up taking over Porsche.

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U.S. Court Shoots Down Saab Suit Against GM Tue, 11 Jun 2013 12:29:40 +0000

When Spyker sued GM for mucking with Saab’s failed deal with Youngman, and wanted $3 billion for its trouble, TTAC’s resident garage lawyers did not give Spyker big odds.

Yesterday, the suit was thrown out.

A U.S. federal judge said the GM had the right to block the sale of a company using its technology, Reuters reports. Said U.S. District Court Judge Gershwin Drain said in a hearing in Detroit:

“General Motors had a contractual right to approve or disapprove the proposed transaction. The court is going to grant the motion to dismiss the matter.”

Spyker Chief Victor Muller was in the court room. He did not want to say whether he would appeal. “We will be awaiting the written order and then we will assess,” Muller told Reuters.

The allegedly aggrieved entity was Saab and not Spyker. Saab went bankrupt, and its assets were bought by a murky Chinese entity. Spyker acquired the rights to sue GM. As usual, Muller did not use his own money. Back then, a Spyker press release said:

“Spyker has secured the financial backing required to see the lawsuit through to the end from a third party investor.”

More money down the drain.

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Hyundai/Kia Fuel Economy Lawsuits In Motion, Compensation Could Total $100 Million Wed, 07 Nov 2012 18:03:58 +0000

Well, we knew this one was inevitable. A compliant filed in Ohio court against Hyundai and Kia due to their overly optimistic fuel economy claims.

Automotive News outlined the nature of the complaint, which is seeking class-action status

The complaint, filed Sunday in U.S. District Court for the Southern District of Ohio, seeks attorney fees as well as unspecified damages for U.S. consumers who purchased or leased any of the eight Hyundai and five Kia nameplates cited in the suit.

The suit also asks the court to permit Ohio consumers who bought Hyundai or Kia vehicles with misstated mileage labels to back out of their purchase or lease agreements.

Meanwhile, The Detroit News is quoting Moody’s on the cost of the debacle, with the ratings agency throwing out nine-figure sums as the cost of making things right

Moody’s, one of the nation’s major ratings houses, said it estimates that Hyundai Motor — including Kia — “will incur additional annual costs of about $100 million until the affected models are largely scrapped, which is less than 1 percent of its adjusted” earnings.

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Will Creditors’ Lawsuit Undo GM Bailout? Bankruptcy Judge ‘Shocked’ By Undisclosed GM Canada Deal Tue, 09 Oct 2012 13:00:18 +0000

A couple of weeks ago the Wall Street Journal published an article about a “little-noticed” lawsuit in U.S. Bankruptcy Court filed by a trust representing “old” GM’s unsecured creditors. Those creditors are challenging a 2009 deal between GM Canada and a group of hedge funds that helped keep GM’s Canadian subsidiary out of its own bankrupcy. It’s a bit surprising to me that the WSJ article itself got very little notice in the automotive world because, if successful, the lawsuit could undo at least part of GM’s restructuring or result in a $1.3 billion price tag for the automaker. In regulatory filings GM has said its possible exposure will be less than that, $918 million, though in theory the bankruptcy court could reopen the entire bankruptcy, which would be much more disruptive to GM than just paying out a billion dollars.

The plaintiffs in the suit claim that the deal not only treated them unfairly compared to other creditors , but that it was also not properly disclosed to Judge Robert E. Garber, who presided over General Motors’ bankruptcy and restructuring in the U.S. Bankruptcy Court for the Southern District of New York. Perhaps ominously for GM, Judge Garber has already expressed “shock” over the fact that he was not informed of the deal, which the claimants allege was consummated after the Detroit based automaker filed for bankruptcy in his court. Had GM Canada been forced to file its own bankruptcy over that debt it would have likely substantially stretched out GM’s bankruptcy process from weeks to possibly years.

Earlier this year, Judge Garber said,

“When I heard about that, it wasn’t just a surprise, it was a shock. When I approved the sale agreement and entered the sale approval order I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs. It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all.”

The case centers on $1.3 billion in GM Canada debt to a group of hedge funds that was waived in 2009 after GM Canada agreed to make a lump sum cash payment of $367 million (USD) to those hedge funds. To make that cash payment, GM Canada in turn borrowed $450 million from old GM. New GM says that it can prove that loan was made before it filed for bankruptcy before Judge Gerber. The trust representing the creditors says that the deal was backdated to hide it from the judge. Those creditors are unhappy because while 35 cents on the dollar doesn’t sound like a great deal, that’s better than what they got.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can dig deeper at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading – RJS



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Junkyard Find: 1984 Audi 5000 S, With Voodoo Incantantion To Ward Off Unintended Acceleration Tue, 02 Oct 2012 13:00:54 +0000 The Audi “Unintended Acceleration” debacle of 1986, which whacked American Audi sales by about 75% within a few years, makes the 1982-86 Audi 5000 an historically significant Junkyard Find. The 60 Minutes piece about the 5000′s allegedly malevolent behavior turned the car’s image from masterpiece of aerodynamic science to bloody-clawed multiple murderer, with predictable effects on resale value for existing cars. This means that the 5000 of the Unintended Acceleration era that managed to stay on the good side of The Crusher until 2012 is a survivor of astonishing tenacity.
Plenty of cars had smooth lines like this by the early 1990s, so the ’84 5000 doesn’t really stand out from the crowd these days. Back in the early 1980s, however, this car looked double-take-inducing futuristic.
Everybody has flush glass now, but noisy and drag-inducing inset windows were the norm in the early 1980s. Here’s the car that introduced the flush-glass idea to the marketplace.
So, yeah, this car got a bum rap thanks to panic-mongering journalism. Ford managed to emerge comparatively unscathed from the infamous “Park-To-Reverse” controversy of a few years earlier, even though thousands of 1966-80 Fords really did suffer from a dangerous mechanical flaw.
Not that the 5000 was without its real-life weaknesses, of course; high complexity levels and glitchy electrical components kept cost-of-ownership fairly high for these things.
Note the recall-mandated decal applied to the shifter console. It’s too bad that Audi didn’t add a dash decal identifying the difference between the throttle and brake pedals.
I was impressed by how clean this car looked. Here’s why: 62,837 miles on the clock. Original owner who only drove to church on Sundays?

21 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 01 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 02 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 03 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 04 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 05 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 06 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 07 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 08 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 09 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 10 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 11 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 12 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 13 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 14 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 15 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 16 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 17 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 18 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 19 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin 20 - 1984 Audi 5000 S Down On The Junkyard - Picture courtesy of Murilee 'Unintended Acceleration' Martin Zemanta Related Posts Thumbnail ]]> 88
German Court Throws Out Two Suits Against Porsche Wed, 19 Sep 2012 11:02:40 +0000

A court in Braunschweig, Germany, dismissed two investor lawsuits against Porsche SE, “sending a discouraging signal to claimants still seeking just over 4 billion euros ($5.2 billion) in damages in Germany,” as Reuters says.

Several investors had brought suit against Porsche after they found themselves caught in a massive short squeeze. The dismissed lawsuits only wanted relatively minor compensation of 4.7 million euros. The billion dollar suits are still pending, but observers in Germany think this is a landmark decision.

Apart from the German lawsuits, there are more pending in the U.S. Both are caught up in matters of jurisdiction.

Volkswagen recently finalized buying the Porsche car business,  leaving a relatively hollow Porsche holding company behind.

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Get The Pöpcørn: Spyker Sues GM For 3 Billion Mon, 06 Aug 2012 13:39:47 +0000


That was the first comment  from the acolytes of the recently a bit depressed fansite Saabsunited, when it was announced that Victor Muller’s Spyker sued GM for $3 billion over Saab’s bankruptcy.

“It’s hard to believe. We have no comment until we see the lawsuit,” said GM spokesman James Cain to Reuters. The complaint is attached to this message.

According to a statement by the propeller-brand, Saab’s bankruptcy was GM’s fault:

“GM’s actions had the direct and intended objective of driving Saab Automobile into bankruptcy, a result of GM’s … interfering with a transaction between Saab Automobile, Spyker and Chinese investor Youngman that would have permitted Saab Automobile to restructure and remain a solvent, going concern.”

Spyker sued for “tortious interference with economic ecpectancy”  (translation: GM mucked with Saab’s deal with Youngman to protect itself from competition in China.)  The suit was brought in the U.S. District Court for the eastern district of Michingan (Soutrhern Division.)

Now isn’t the aggrieved entity Saab and not Spyker? Sure it is.  Saab’s new owners apparently don’t see much merit in the lawsuit. Says the press release:

“Since Saab Automobile is in receivership and hence incapable to contribute to the costs of litigation, Spyker and Saab Automobile have entered into an agreement pursuant to which Spyker will bear the costs of such litigation in exchange for a very substantial share of Saab Automobile’s award when the proceedings are successful. Spyker has secured the financial backing required to see the lawsuit through to the end from a third party investor.”

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Louis Bird Is About To Get Swindled, And Not By Hyundai Wed, 11 Jul 2012 17:32:21 +0000

A gentleman named Louis Bird is suing Hyundai because his 2011 Elantra isn’t getting the claimed 40 mpg that Hyundai’s ads apparently tout. Bird is being supported by a group called Consumer Watchdog, and if that rings a bell, maybe it’s because TTAC has dealt with them  a few times in the past regarding Hyundai.

Before we delve into Louis Bird’s folly, let’s recap the situation for those who are just tuning in. Consumer Watchdog has been hassling Hyundai since December regarding the Elantra’s 40 MPG highway mileage claims.  Mileage tests are often conducted by the automakers who then report their findings to the government, with the threat of severe financial penalties if they lie. Independent testing done by our own Jack Baruth returned  “35-36 mpg in conditions which were far from the test lab“, with Baruth being satisfied by the results, even if they didn’t quite hit the 40 MPG mark that is possible under the carefully controlled conditions of a fuel economy test. Popular Mechanics was another publication that managed to match Hyundai’s claims.

The lawsuit appears to hinge on the fact that Hyundai apparently advertised the car as  “The 40 MPG Elantra”, without a voice-over disclosing that the 40 MPG figure was related to a highway mileage estimate, without stating that city figures would vary significantly. The complaint acknolwedges that disclaimers did appear, but they were  “neither clear nor conspicuous” since they were comprised of text being flashed at the bottom of the television ads. Bird is alleging similar tactics were used for print ads.

A chat with TTAC’s General Counsel didn’t yield a whole lot; being unfamiliar with California law, he was unable to accurately assess how successful Bird would be in getting a judgment against Hyundai. He did have some commentary on the peripheral details of the case

“Since it’s a class action Hyundai will probably want to avoid having the evidence dragged out in public through the court system, and since it’s being done on contingency the lawyers don’t want to drag it out either as the costs which they have to cover are enormous – so there’s a natural inclination on both sides to settle.”
However, unlike Honda, the Koreans are less concerned about negative publicity and may put up more of a fight. The only thing that you can say with certainty about these [class action] claims is that at the end of the day, the loser pays out a lot of $$, the plaintiffs get some token amount of damages, and the lawyers do very well.
Consumer Watchdog and the law firm representing Louis Bird have the most to gain here, even if Hyundai ends up “winning”. Louis Bird looks set to come out on the losing end, no matter what happens.


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Honda Hybrid Lawsuit May Not Be Able To Run On Battery Alone, So To Speak Mon, 23 Apr 2012 14:10:39 +0000

Remember Heather Peters, the attorney who is suing Honda? Well, if a recent article by’s Jacob Brown is any guide, her lawsuit might be the equivalent of Honda’s IMA hybrid system: unpopular, mostly ignored, and unable to operate without serious help from outside forces.

Brown reports:

The Friday hearing debated damages, the purportedly diminished resale value of Peters’ Civic, and the fuel economy numbers a car like hers could achieve. Peters has said that she is averaging 29 mpg in a car rated almost twice that. But it came up Peters wouldn’t let her local Honda dealership test her car for fuel economy because Honda said it didn’t want her to post footage of it on her site before the appeals court date.

In the hearing, Peters claimed the Honda’s battery in its Integrated Motor Assist hybrid system would not hold a charge, dropping her fuel economy well below its factory-rated 50 mpg. Technical expert Neil Schmidt countered in testimony that, according to records from her Honda dealership, Peters’ car had never had service problems and that her tires showed excessive wear on their outside shoulders, a sign of aggressive driving. Peters said she was not a lead-foot driver, but Honda attorney Roy Brisbois introduced the fact that her last four cars were two BMW Z3 roadsters, a BMW X5, and a Mazda RX-8—none of which are exactly vehicles for the unsporting driver.

Mr. Brown appears virtually alone among the automotive media in his willingness to genchi-genbutsu. Ironically, that’s a Honda catchphrase, meaning “go to the actual spot, see the actual situation”. We will keep you posted on his coverage as it appears.

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Automotive Lawsuit History Unearthed, Junkyard Style: The Ford Park-To-Reverse Warning Label Sat, 31 Mar 2012 13:15:32 +0000 For decades, I’ve been seeing Ford-family vehicles with ugly, pointless warning labels stuck to their instrument panels: Unexpected and possibly sudden vehicle movement may occur if these precautions are not taken. I’d always assumed that these were ex-rental cars, but after I mentioned the warning stickers in this week’s ’75 Ford Maverick Junkyard Find post, several readers pointed out that the stickers were the result of Malaise Era litigation. Of course!
It turns out that many Ford automatic transmissions of the 1966-1980 period developed a tendency to slip from Park to Reverse, on their own, leading to lots of unpleasantness (if we are to believe Ralph Nader’s Center For Auto Safety, this problem caused 6,000 accidents, 1,710 injuries, and 98 fatalities). Since we’re talking about something like 23 million vehicles here, Ford resisted launching the biggest recall in automotive-industry history; the DOT agreed in 1980 to have Ford send out warning labels to the 23 million affected owners. Some of them used the stickers, most didn’t, and we still see them from time to time in junked Fords, Lincolns, and Mercurys. So, another bit of junkyard-learned Malaise Era automotive history, a nice chaser to the story of the FLOOR TEMP warning light.

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Piston Slap: Porsche Customer Service doesn’t Stink? Tue, 27 Dec 2011 17:47:54 +0000


Sam writes:

Hello, can you tell me what ever happened with the Porsche IMS concern? At 18K miles, an IMS bearing failure has caused a catastrophic engine failure in my Porsche 911. My Porsche dealer (who has done all of the Porsche recommended service on the car since new) just told me that there is nothing that they or Porsche can or will do, and that it is an isolated incident. I have since been doing research online, and I find out that an IMS bearing failure is not at all a rare occurrence.

I am not a litigious person and I am not out to tarnish the Porsche name. But with a repair cost of $19k, I cannot afford to get my car fixed. I am looking to get Porsche to step up and address what would appear to be a bearing design defect.

The problem exists in Carerras, Boxsters and Caymans, and Porsche has redesigned this bearing 4 times and have even designed the IMS completely out of the newest 997 direct injection engines. I need some help please and would be sincerely grateful for any help you can give me.

My Porsche dealer here at first told me that only the stud on the Intermediate Shaft had broken, and that they had caught it in time to prevent catastrophic engine damage. They quoted me on a $2000. repair in which they would install an aftermarket-3rd party bearing manufactured by LN Engineering. They told me that they have installed as many as 6 of the LN Engineering bearings in cars brought in for Porsche authorized service. Then 3 days later when the aftermarket bearing arrived and they went to remove the IMS from my car they discovered that the damage had been much more severe than they had initially thought and thus would only be able to proceed using a Porsche factory rebuilt engine at a cost of $19K. Even if the failure rate is <1%, the cost to the car’s owner is huge (I will not be able to get mine repaired as I do not have that kind of money). It is very telling that an authorized Porsche dealer would be installing non-Porsche manufactured bearings in Porsche engines unless of course…….it is because they know that there is a problem with the OEM bearing design.

While I do not want to see the dealer get into trouble with Porsche Corporate (call me selfish since I only want my car fixed and not some class-action lawsuit) I think that this is significant.

Respectfully yours,

Sajeev answers:

Your assessment of the situation is complete and seems even more accurate. Yes, the IMS bearing is junk and they fail on many Boxsters, 996s non-turbos and even 997s…except for the latest DI motors which silently resolved the problem. My question to you, at what year of ownership did this happen? Because at 18k, any late model 911 is under warranty and they are legally obligated to fix it under that warranty.

Reading between the lines, many Porkers run out of warranty because of time, not mileage. Such is the life of a play toy. And in that case, I fully understand your situation and I wish you and your 996 (probably) the best of luck.

Months later, Sam updates:

Mr. Mehta: Porsche came through for me in a big way. My 2003 now has a new engine and my feeling is that they went above and beyond for me. I will be buying Porsche again as they stand behind their Products.

Sajeev Concludes:

Maybe Porsche isn’t the only one, but they are in our scope for now: this Piston Slap shows that a loyal customer gets the treatment they deserve, warranty or not.  And those who deviate from the dealership’s paper trail tend to not get what’s coming to them. And heaven forbid you put your Porker on the track, accidentally hit the rev limiter (Big Brother is Watching) a couple times, put a K&N/cat-back exhaust and get your service work done elsewhere.  My argument hinges on your statement:

“My Porsche dealer…who has done all of the Porsche recommended service on the car since new.”

Congrats Sam, I will consider you one of the lucky ones. Best and Brightest, your thoughts???

Send your queries to . Spare no details and ask for a speedy resolution if you’re in a hurry.

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Ford Sued For Sync Sat, 09 Jul 2011 11:58:34 +0000


Ford’s Sync doesn’t get a break. It attracted undue attention from LaHood’s distracted driving crusade. Consumer Reports had issues with the system. Sync sank Ford in the 2011 J.D. Power Initial Quality Survey. Can it get any worse?

Yes, it can. Ford is being sued for patent infringement.

Bainbridge Island-based Eagle Harbor Holdings  has filed a lawsuit against Ford, alleging infringement of seven patents.  The company says that Ford infringed on seven of its patents for the technology behind Sync and some other safety technologies such as Active Park Assist, Blind-Spot Identification System with Cross Traffic Alert, Integrated Control System for Stability Control, and MyKey.

According to the Seattle Times, Eagle Harbor began developing the technologies more than 10 years ago. Talks between Eagle Harbor and Ford began in 2002, says the lawsuit. According to the filing, Ford stopped communication with Eagle Harbor in 2008 and began incorporating the technology into its products over the next year.

Does that mean Ford will be out of Sync? Not really. Should Ford lose, it will be out of a little money.

“We’d much rather do business with Ford as customers than have to file this lawsuit against them. Their business could mean millions,” said Jeffrey Harmes, general counsel for Eagle Harbor.

Eagle Harbor founders Dan and Joe Preston also founded Airbiquity, a Seattle vehicle-services technology company, in 1997. The Seattle Times says that “Airbiquity’s technology is in General Motors’ OnStar wireless platform, which connects motorists to information services.”

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German Investment Funds Prepare Billion Dollar Court Case Against Volkswagen Sun, 01 May 2011 20:43:26 +0000

Volkswagen was all grins when litigating hedgies lost the first round in court in the U.S. (it’s on appeal) and when the public prosecutor in Stuttgart dropped some of the  investigation into former Porsche CEO Wendelin Wiedeking and former CFO Holger Härter (only to add new angles.)  Until the matters are cleared, Volkswagen and Porsche officially are not married, unofficially, they share all available beds.

Now, a new lawsuit causes frozen faces and acid reflux at the very top of Volkswagen: German investment funds intend to involve prominent supervisory board members of Volkswagen AG in a billion dollar court case.

According to Germany’s Wirschaftswoche, the Munich law firm CLLB is preparing the paperwork for a suit brought against Volkswagen. According to the magazine, papers will be filed in September at the court in Braunschweig, right around the corner from Wolfsburg. The suit alleges that members of the Volkswagen supervisory board had known of stock market manipulations by Volkswagen, but had not informed the public – as required by law.

The list of witnesses reads like a who-is-who of German business and politics.  Listed as witnesses are the former Porsche chief Wendelin Wiedeking, VW CEO Martin Winterkorn, VW supervisory board chairman  Ferdinand Piëch, and Germany’s President Christian Wulff, who had a seat on the board when he was premier of Lower Saxony.

Wirtschaftswoche does not know the size of the award the CLLB lawyers are going for, but it assumes it will be around  €2.86 billion  ($4.24 billion).



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Tesla Vs. Top Gear: The War Of The Blogs Sun, 03 Apr 2011 19:26:30 +0000

Compared to smothering hugs, ample booze and possibly a little deniable blackmail, suing a media outlet rarely is the best way to perform the skillful art of public relations. This is what Tesla is finding out right now.

Most likely after throwing words of caution by its own PR folk to the wind, Tesla decided to bring a defamation suit against the BBC’s Top Gear. According to Tesla’s own blog, Top Gear perpetrated “serious and damaging lies,” such as claiming that “the Roadster’s true range is only 55 miles per charge. “ Of course, writes Tesla’s Communication VP Ricardo Reyes in the blog, Tesla is “not doing this for money. As the world leader in EV technology, Tesla owes it to the public to stop Top Gear’s disinformation campaign and provide the truth. “

Top Gear has its own blog. In it, Top Gear’s Executive Producer Andy Wilman answers with some counter battery fire. Normally, says Wilman, when a suit is brought, both sides keep their respective mouths and blogs shut while “brainy people wearing wigs” (lawyers wear wigs in the UK, at least in court, sometimes … never mind) argue over the matter. “Tesla, however, doesn’t seem content to wait for the legal eagles to settle matters,” says Wilman. “On the contrary, it’s been very busy promoting its side of the argument through the media.”

Tesla’s PR agency PHA Media even contacted the British TV program “The One Show” and invited them to “have some fun with this.” Too bad The One Show is a show of BBC One (hence the name), and it just so happened that Top Gear “accidentally received” the email. Which allowed Top Gear to have some fun with it.

No longer bound to the “pre-legal etiquette of keeping schtum until we get our day in court,” Wilman then provides a point for point rebuttal. The core is that Top Gear “never said that the Tesla’s true range is only 55 miles, as opposed to their own claim of 211, or that it had actually ran out of charge. In the film our actual words were: ‘We calculated that on our track it would run out after 55 miles’.”

That 55 miles number did not come from Top Gear’s “heads, but from Tesla’s boffins in California. They looked at the data from that car and calculated that, driven hard on our track, it would have a range of 55 miles.” (Before lawyers prepare another defamation suit: “Boffins” is nothing bad. In British English, it stands for people engaged in technical or scientific research. At worst, “boffin” could be understood as “geek.”)

Tesla concedes that Clarkson said: “Although Tesla say it will do 200 miles we worked out that on our track it would run out after just 55 miles.”

I guess even a wig-wearing judge will give this one to Top Gear. (Note to Tesla: When quoting from videos, QUOTE VERBATIM.)

As for the rest, if you are interested in a lot of he said, she said, here is Tesla’s blog, and here is Top Gear’s rebuttal.

Again, if Tesla would ask me for advice (I’m sure they won’t) I’d tell them to quietly settle. Each blog on the planet that writes about that stuff will do what we do, and link to Youtube. There, at the times of this typing, the Tesla segment already had racked up 336,139 views. (Not counting other clips of the same segment floating around in various digital formats.) If what is said there indeed is lies, then this is how lies multiply.

Should Tesla win, and the segment is blocked from retransmission, that Youtube flick will become a collector’s item. And what will people remember? That the Tesla is running out of battery mighty fast. Which  Tesla most likely does not want them to remember.

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NUMMI, Toyota Sue “Old GM” For Contract Breaches Wed, 01 Dec 2010 15:48:41 +0000

Both Toyota and the remains of its joint venture known as NUMMI have sued the remains of “Old GM” for breach of contract according to two separate reports in the Wall Street Journal [sub]. NUMMI is seeking $365m, claiming GM caused the collapse of the joint venture by unilaterally pulling out as it collapsed into bankruptcy,  sticking Toyota and NUMMI with the bill.

Those decisions breached … commitments to Nummi and sounded its death knell,” said the lawsuit, filed last week. And unlike Toyota, GM’s bankruptcy estate “has refused to contribute to Nummi’s deficit during the wind down”

Toyota, meanwhile, is suing for some $73m in development costs for the Pontiac Vibe, a vehicle that GM was supposed to sell for another two years.

Toyota has reportedly been in settlement talks with Motors Liquidation Corp (aka “Old GM”), but failed to reach an agreement with its former partner. And because Motors Liquidation is facing far more claims than it has money to pay out, these lawsuits may be about more than just money. UAW workers were encouraged to hold protests around California and the country in the wake of NUMMI’s shutdown, blaming Toyota for “killing American jobs.” These lawsuits might not put Toyota in front of (for example) asbestos claims or any of the other demands on Old GM’s dwindling funds, but if they win it will prove once and for all that GM, not Toyota was responsible for killing NUMMI.

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Paralyzed Woman Puts Toyota In A World Of Hurt Tue, 31 Aug 2010 14:27:59 +0000

So you think when a big company gives you (and your lawyer)  a sizable sum to settle a lawsuit, the lawsuit is settled?  To their horror, Toyota just found out that it’s not over when it’s over. Toyota could find itself wide open. Possibly to hundreds of old lawsuits that were settled and could haunt them again. Five years ago, Pennie Green’s Camry rolled over. Of course, it was Toyota’s fault, why don’t they build roll-over proof Camrys.  The woman was paralyzed. The personal injury suit was settled for $1.5 million. That should be it.  Then Ms. Green and her lawyer had a change of mind that could change the world of jurisprudence. At least in America …

Last fall, Ms. Green filed a motion in Texas state court. She said she had been duped. According to the motion, Toyota  had deliberately withheld documents related to vehicle safety.  If Ms. Green would have had that information, she would have sought more money or would have gone to trial.

In February, Toyota asked the court to stay the case and to dismiss the motion, on the grounds that the court did not have jurisdiction in the matter. On Friday, the court lifted the stay, allowing the proceedings to continue.

According to the LA Times, “the ruling could have serious implications for Toyota. If Greene’s allegations are upheld the Japanese automaker could face not only a civil sanction, but also the prospect that dozens — if not hundreds — of other long-closed lawsuits against the automaker could be reconsidered on similar grounds.”

That in addition to hundreds of lawsuits stemming from its sudden-acceleration recalls over the last year. And that in addition to a record $16.4-million fine paid to the DOT. Slowly we’ll be talking serious money.

Who’s behind the matter? Dimitrios Biller, the former Toyota lawyer who had left the company with thousands of documents.  Biller had defended Toyota in the Green case. Biller and Toyota are in court also.

In Biller’s suit against Toyota, filed in federal court in California, he alleged that Toyota “conspired and continues to conspire, to unlawfully withhold evidence from plaintiffs” in rollover cases. Amongst the cases Biller mentioned was the Green case.

With the stay lifted, Biller will probably be able to testify in the matter. “We are disappointed that Mr. Biller is using the tragedy of Ms. Green’s accident to further his own claims against Toyota, which we strongly dispute and will continue to fight,” Toyota said in a statement.

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Will Hedge Fund Lawsuits Scupper The VW-Porsche Deal? Thu, 08 Apr 2010 17:20:23 +0000

Generally speaking, official prospectus information tends to run on the alarmist side, warning investors of any and all possible problems, regardless of how likely they are to take place. Which is why you rarely see news organizations like Reuters pick up on prospectus warnings, like today’s story on a Volkswagen warning that its merger with Porsche could be scuttled by lawsuits filed by angry hedge funds.  Porsche’s notorious “short squeeze” of hedge funds who were speculating on VW stock in the leadup to its planned takeover has drawn lawsuits in several countries which, according to VW’s recent capital increase prospectus, could:

place a considerable burden on Porsche’s financial resources and liquidity position, and if substantial in magnitude, could even lead to the insolvency of Porsche Automobil Holding SE…. The merger may not be possible at all, or may only be carried out at a later date, and the planned target structure of the integrated automotive company with Porsche may not be achieved or may only be achieved at a later point

With a billion bucks at stake in just one of those suits alone, VW’s warning is wildly appropriate. The only question remaining: do the hedgies have a shot at winning? Given that Porsche was commonly being called “a hedge fund that makes a few cars,” CFO Holge Härter’s defense that “we are not speculators—we never have been and will never want to be,” rings a bit hollow. Especially considering the Porsche shareholder meeting transcripts that have emerged. The saga continues…

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Quote Of The Day 2: Toyota Tales Edition Wed, 07 Apr 2010 23:03:55 +0000

The Detroit News has just published a quote that allegedly comes from a January 16 email from Toyota Motor Sales USA group vice president for environmental and public affairs Irv Miller to “company officials in Japan.” Miller’s quote reads:

I hate to break this to you but WE HAVE a tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models. We are not protecting our customers by keeping this quiet. The time to hide on this one is over. We better just hope that they can get NHTSA to work with us in coming with a workable solution that does not put us out of business.

The DetN says Toyota refused comment on the quote, but doesn’t disclose how it obtained the email. If we had to hazard a guess at the source of the email, we’d say that one of the legion of lawyers currently suing Toyota might know something about it [UPDATE: The Freep says "the e-mail was among the 70,000 pages of documents NHTSA has collected as part of its investigation"]. Several lawyers are already gloating to Automotive News [sub] that NHTSA’s decision to pursue the maximum fine for Toyota’s unintended acceleration problem will help their cases (though this is hardly guaranteed), and they are desperately seeking any kind of evidence of a Toyota coverup. Meanwhile, Toyota’s UA-related recalls aren’t even over yet, as Reuters reports that the world’s largest automaker has only just recalled 13,000 Camrys from the Korean market. But considering that GM won’t have the much-hyped brake-override “failsafe” for unintended acceleration on all of its vehicles until 2012 [via AN [sub]], it will be tough to paint Toyota as being a complete outlier on automotive safety. In fact, the only thing that seems certain about this story is that there are million of reasons for lawyers and reporters to keep chipping away at a phenomenon that seems to largely have been a product of operator error.

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GM Sued By UAW For $450m Delphi VEBA Shortfall Wed, 07 Apr 2010 17:59:39 +0000

As if to confirm that GM’s  benefit obligation situation could actually be worse than today’s GAO report lets on, Automotive News [sub] is reporting that the UAW has sued GM over $450m in unfunded healthcare obligations for Delphi retirees. GM promised to fund a $450m Voluntary Employee Benefit Association for Delphi retirees in 2007, and Delphi’s bankruptcy court confirmed the commitment in last October. But, according to the UAW suit:

the UAW made a written demand that the company honor its contractual obligation to make the foregoing payment [last October... but] that UAW demand was rejected and since that time the company has failed and refused to make the contractually required payment.

That obligation apparently was not voided by GM’s bankruptcy, although The General’s spokesfolks have yet to officially comment on the UAW’s suit.

One thing is for certain though: this news clearly aggravates GM’s benefit cash crunch at a time when it is still barely able to cover its “cost of sales” with sales revenue and is still bleeding cash.According to the GAO report, GM’s payment schedule to meet minimum pension obligations looks something like this:

Adding another nearly half-billion dollars in Delphi VEBA costs doesn’t make a huge difference in light of these giant looming obligations, but it’s just one more cash suck that will weaken GM at a time when it needs to conserve cash on hand for these future outlays. Not to mention the necessary investments in new products, rescues of struggling overseas divisions in Germany and Korea, and maintaining the incentives that have been necessary to achieve current volume levels. To use the parlance of our elected leaders, a billion here, a billion there, soon you’re talking about real money.

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Toyota Class-Action Lawsuits “A Little Cottage Industry Of Its Own” Tue, 09 Feb 2010 13:46:43 +0000

The legal angle to the Toyota recall story has been a source of constant amusement, from an early attempt to prevent Toyota from enacting its gas pedal fix, to news today [via Reuters] that at least 30 class-action suits have been filed since the recall began. “This is going to a little cottage industry all of its own,” says Matt Cairns of DRI, the Voice of the Defense Bar, the largest U.S. civil defense attorney association.

And why wouldn’t it be? We’re talking about a high-profile company that is dependent on public good will and has billions of cash on hand. Throw in the mysterious nature of unintended acceleration, the scope of the recall, and the perception that Toyota dragged its feet addressing the issue, and you’ve got the makings of a lawyer’s bonanza. And it’s only getting better.

“As this issue gets more attention, Toyota owners who had accidents in the past few years are going to wonder if those accidents were caused by unintended acceleration,” says one lawyer with Firestone scandal experience under his belt. “At some point, Toyota may have to decide to settle out of court. It’s far more expensive to go to court and would prolong the pain for Toyota and many families.”

We’ve already documented suits alleging that Toyota’s electronic throttle control lacks failsafes, but according to the lawyers in the Reuters piece, suits are being filed for everything from lost resale value to violation of warranty terms caused by selling faulty vehicles, to concealment of known defects (including the Prius brake issue). “There is a very minuscule percentage of vehicles actually experiencing unintended acceleration,” says another lawyer. “But that will not prevent people from filing lawsuits against Toyota.”

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Honda Settles Lawsuit Over Civic Hybrid Mileage Claim Tue, 15 Dec 2009 19:11:34 +0000 Toyota fails on quality, Honda fails on efficiency, what's next?

In 2007, over 120,000 Civic Hybrid owners had a beef with Honda. So much so, in fact, that they sued the Japanese company. What do you reckon the reason could be? Unsafe cars? Think again. Poor build quality? No, they sued Honda because their Civic Hybrids didn’t get the stated fuel mileage. New York Times’ Wheels Blog reports that 2 plantiffs, John True of Ontario, California, and Gonzalo Delgado of Chino Hills California along with 120,000 other Honda Civic Hybrid owners argued in the United States District Court for the Central District of California that they were only getting 31 mpg instead of the advertised 49mpg in the city and 51 mpg on the highway. The plaintiffs believe that Honda’s advertising led them to believe that the Civic Hybrid would get better fuel economy than is likely in real world driving. Needless to say, the plaintiffs weren’t challenging the EPA methods of predicting mileage, just that Honda, allegedly, deceived customers by not making it clear that they were unlikely to achieve the EPA figures. Honda, naturally, have a different take.

They believe that assertions against them are illogical. The EPA tested the vehicle and gave the car a rating. They also say they followed all federal regulations and refuse to admit to any wrongdoing. What makes this story even more bizarre is the outcome. Honda, for whatever reason has decided on a settlement. What has been proposed is that Mr True will receive $12,500, Mr Delgado will receive $10,000 and the remaining 120,000 unhappy Civic hybrid owners will get, at most, a coupon for $1000 off a new Honda. And as with every coupon, there’s small print. The coupon isn’t valid for the Insight, Civic Hybrid, Fit or any certified used Honda or Acura. The coupon cannot be transferred and the current hybrid must be sold or traded in. If that settlement doesn’t grab the plaintiffs, then there are 2 more options: A $500 discount for a customer who doesn’t want to sell their Civic Hybrid or $100 cash. “The purchaser of a Honda Civic Hybrid is a person who is interested in fuel economy,” said Clarence Ditlow, the Executive director of the Centre for Auto Safety, “So, the settlement allows them to buy any vehicle but a fuel-efficient vehicle. In other words, you get a coupon for the purchase of a vehicle that you don’t want.” pointing out the obvious flaw with Honda’s proposed settlement. But Mr Ditlow forgot to mention the cherry on the settlement: Honda will also throw in a DVD on getting better fuel economy. At least Honda didn’t take the condescension any further and include a copy of “An Inconvenient Truth.”

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GM Sues Steering Supplier Mon, 23 Nov 2009 22:13:22 +0000 The hidden cost of cost-cutting?

The AP reports that GM is suing supplier JTEKT North America Inc. of Plymouth, MI for faulty steering systems used in 2005 model year and later Cobalt, G5 and HHR models. GM’s suit alleges the JTEKT steering systems exhibited “excessive gear backlash,” causing a variety of noises that the General has spent $30m fixing under warranty so far. “JTEKT contends the components all met the specifications and testing requirements that GM gave it,” says the supplier’s lawyer. “The issues do not affect the operator’s ability to control the vehicle. This is a noise issue.” GM admits that the issue does not affect safety, but claims total repair costs could continue to rise as more vehicles receive upgrades under warranty. Current Cobalts and derivative models have received upgrades, although the AP does not specify when they took place. Keep an ear out for this problem if you’re considering a used Cobalt.

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