State Farm Memo Says Ford Hid Problem

The government released documents Monday that an insurance company contends show Ford Motor Co. failed to provide key information to investigators about a faulty ignition switch in millions of vehicles that could cause fires.

A Ford spokesman said the auto maker cooperated with the National Highway Traffic Safety Administration’s investigation and that State Farm Insurance is trying to put pressure on the company because of lawsuits.

In 1996, Ford recalled 8.7 million vehicles--model years 1988-93--in the United States and Canada to replace the faulty ignition switches. It was the largest recall by a single auto maker in U.S. history.

State Farm sued Ford in January for reimbursement on claims it paid on fires, contending that the auto maker and a supplier hid problems with the ignition switch that caused vehicles to catch fire.

There have been more than 1,100 reports of fires from the switches in this country, and in some cases fires occurred with the vehicles parked and the engines shut off.

The State Farm lawsuit, filed in Los Angeles, identified 80 claims in California in which the insurer paid more than $440,000. But the insurance company believes it paid millions of dollars nationwide for fires caused by the switch.

State Farm estimates that 26 million vehicles were built with the potentially faulty switch.

In a 19-page memo, included among the documents released Monday, State Farm lawyers argued that Ford knew the switches were causing fires but did not tell the NHTSA and instead tried to limit the agency’s investigation.

“Ford’s internal documents show that the company knew, at least as early as 1990, that the defective ignition switch had caused numerous fires in Crown Victoria, Econoline and Aerostar vans and in other vehicles,” State Farm lawyers said in a memo released with the documents.

Meanwhile, Ford “redesigned the switch . . . specifically to avoid steering-column fires,” the memo said.

A NHTSA investigation into the Crown Victoria car fires was closed in November 1992 after Ford told the agency it was unaware of any “common cause of steering-column fires.”

But Ford had agreed two years earlier to replace the switches in more than 27,000 vehicles used by Federal Express. It also agreed to replace switches in 500 vehicles used by post offices in Florida and California, the State Farm memo said.

In 1994, the agency opened investigations into Ford F-series pickup trucks from model years 1986-88 and 1990 Escorts. Ford again told the agency it was unaware of any common cause for the reported fires, the memo said.

Ford spokesman Jim Cain said the auto maker “cooperated fully and complied with requests for information in all of NHTSA’s investigations.”

Company lawyers were “studying and digesting” the documents and that would take several days, he said.