Ford Agrees to Pay Out Over Faulty DSP6 Transmissions
Ford Motor Co. has agreed to settle a class-action lawsuit with almost 2 million owners and former owners of Focus and Fiesta models equipped with the now infamous six-speed dual-clutch PowerShift transmission. Internally referenced as the DSP6, the unit was a known problem prior to installation. Last year’s scathing report in the Detroit Free Press showed its dark history in gory detail, indicating the automaker had painted itself into a corner and ignored warnings from both engineers and legal advisors not to use the DSP6.
Complaints of vehicles shuddering and stalling, bizarre delays between gear changes, and even full-blown failures to go into gear began streaming in — leaving Ford to pick up the pieces and attempt to downplay the failure as much as possible. Unfortunately, more engineers came forward to bash the transmission over its development and implementation. Johnny-on-the-spot for the topic, the Detroit Free Press recently reported that Ford agreed to settle — with one of the lawyers brokering the deal saying the payout could exceed $100 million.
We’ve also learned how much money Ford spent repurchasing defective vehicles through a voluntary arbitration program conducted during the legal appeal. Court documents state the company bought back 2,666 vehicles for around $47,500,000 between October 2017 and December 2019.
“There’s no cap. The truth is, Ford is going to have to pay out claims until they’re exhausted,” Tarek Zohdy of Capstone Law in Los Angeles explained. “In my opinion, Ford will have to deal with these vehicles until people are done filing their claims.”
“This settlement is entirely reliant on the consumers’ decision to file a claim,” he continued. “It’s up to the consumer whether they want to let Ford keep their money … They created a defective transmission and I wanted to help people get their money back.”
Affected vehicles include the 2011-2016 Fiesta and 2012-2016 Focus models equipped with the six-speed PowerShift; the proposed agreement is an improvement of an earlier version a California appeals court declined to accept last September. Changes include: A guaranteed commitment from Ford of $30 million (minimum) 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; easier processes for former owners and people who leased to get compensated; and simplifying a buyback program.
Ford has been working on the case since 2012 and said it found the latest proposal agreeable, despite it being much tougher on its business. It also warned shareholders in April of legal exposure related to the DPS6 transmission in a Securities and Exchange Commission filing, so none of this was a complete surprise.
“Ford believes the settlement is fair and reasonable, and we anticipate it will be approved by the court following the hearing next month,” Ford spokesman T.R. Reid said on Friday.
U.S. District Judge Andre Birotte Jr., is scheduled to hear the case February 28th for final approval.
[Image: Ford Motor Co.]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Was there still some residual cooperation with Mazda at the time this was designed? The Skyactive-drive seems like it would have worked.
Always good to be reminded where Ford's priorities are. Save a few bucks on a transmission or wait till we get sued? Let's just get a few attorneys employed and call it a day. Ford, like GM, makes it very easy to not consider any of their products. This mentality seems to pervade most product decisions. A good reminder was the recent Explorer/Aviator botched launches. I guess 100 years of experience building cars isn't enough.