Ford Tells SEC of Billions in Possible Product Liabilities

Ford Motor has revealed to the federal government that the company has billions of dollars in potential product liabilities, including an estimated $1.2 billion in lawsuits over allegedly faulty automatic transmissions.

The No. 2 auto maker also said that because of the nation’s liability insurance crisis, it has “little or no coverage” for accidents that might occur this year.

The disclosures were made in the company’s annual Form 10K report to the Securities and Exchange Commission, copies of which were distributed this week to stockholders.

Ford spokesman Tom Foote declined to elaborate when asked how Ford’s lack of insurance compared to past years. But Ford didn’t mention such a predicament in previous years.

The transmission cases involve rear-wheel-drive models that, when idling, allegedly can pop into reverse and take off. The $1.2 billion compared to $1.6 billion a year ago. Foote said the difference represented cases “settled, dropped or otherwise disposed of.”

138 People Killed Since 1980

Ford has been making fewer rear-drive transmissions each year as it converts more cars to front wheel drive.

Last fall, congressional auditors said 138 people had been killed in connection with the alleged defects since 1980, when the Transportation Department agreed not to make Ford recall millions of cars.

Another 88 reported fatalities occurred before the 1980 ruling, the auditors said.

The Center for Auto Safety in Washington and 20 other consumer organizations and individuals sued the National Highway Traffic Safety Administration after the NHTSA refused to reopen the case. A federal judge on April 17 refused to order the NHTSA to reopen its investigation.