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Toyota issues recall announcement affecting 880,000 vehicles

May 2005-Toyota Motor Corp. said it is recalling about 880,000 sport utility vehicles (SUVs) and pickup trucks worldwide because of a defect that could affect steering. In the United States, 774,856 Toyota SUVs and pickup trucks have been recalled, including the 2001-2004 model years of the Tacoma, the 2001-2002 versions of the 4Runner and the 2002-2004 model years of the Tundra and Sequoia. Toyota's recall announcement also affects 22,000 vehicles in Japan, 22,000 vehicles in Europe, 14,000 vehicles in Australia and 10,800 vehicles throughout the rest of the world. Read More


Ford SUV rollover liability could create PR nightmare and financial losses

February 2, 2005

Public Citizen consumer group President Joan Claybrook describes the auto industry's marketing practices to pharmaceutical companies saying, "There is a rush to market for many industries because of strong competitive pressures." Claybrook was the head of the National Highway Traffic Safety Administration from 1977 to 1981 and says the auto industry is willing to face lawsuits because profit outpaces legal costs.

Ford Motor Co.'s gamble to outpace legal costs may end up backfiring. As many as 500 lawsuits claiming defects in Ford Explorers have been filed against Ford, and internal company documents and employee depositions may end up putting Ford's potential liability at over $1 billion by the end.

In addition, the negative publicity because of the rollover lawsuits could have a substantial impact on Ford's future sales. Explorer sales, according to company year-end sales reports, have been falling since 2003.

In 1993, Ford engineers James Cheng and Jessy Li advised the company to reinforce Explorer roof supports to prevent collapses in rollovers, according to company records. However, Ford did not make changes because Christopher Brewer, Ford engineering supervisor, said in a 2003 deposition that the U.S. government did not require any.

Six years later, in 1999, Ford engineers in Venezuela warned Explorers were rolling over and had resulted in at least nine deaths because of flaws in the suspension. Back in 1996, Ford engineers wrote moving the shock absorbers toward the wheels would solve the deficiency, but Ford did not make those changes either.

Ford's appellate attorney says these internal documents and employee deposition does not mean Ford was not acting in good faith, rather the advice was merely part of a debate and different ideas were presented by different people. Other legal experts disagree and think this Ford SUV rollover litigation could be a tremendous strain on the automaker.

The Ford Explorer's first three years on the market had a profit that exceeded the rest of the company, but by 2000 the Explorer's reputation began to suffer. A federal investigation was launched into at least 271 highways deaths involving tread separation by Firestone tires that were mostly equipped on Ford Explorers. An undisclosed number of lawsuits have been settled, but more than 100 of the tread separation cases are still pending.

Ford SUV rollover cases that have no tire failures or cases that involve blowouts of tires by other manufacturers include stability claims and suspension, roof and seat belt defects. Although Ford said in November it would add a rollover protection system to the 2005 Explorers, changes in design will not stop lawsuits, according to attorneys, because several million older models will still be on the road presenting safety risks to vehicle occupants.

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