FREE PRESS INVESTIGATION: OUT OF GEAR

Ford Motor Co. knowingly launched two low-priced, fuel-efficient cars with defective transmissions and continued selling the troubled Focus and Fiesta despite thousands of complaints and an avalanche of repairs, a Free Press investigation found.

The cars, many of which randomly lose power on freeways and have unexpectedly bolted into intersections, were put on sale in 2010-11 as the nation emerged from the Great Recession. At least 1.5 million remain on the road and continue to torment their owners and Ford.

The automaker pushed past company lawyers' early safety questions and a veteran development engineer's warning that the cars weren't roadworthy, internal emails and documents show. Ford then declined, after the depth of the problem was obvious, to make an expensive change in the transmission technology.

Instead, the company kept trying to find a fix for the faulty transmission for five years while complaints and costs piled up. In the interim, Ford officials prepared talking points for dealers to tell customers that the cars operated normally when, in fact, internal documents are peppered with safety concerns and descriptions of the defects.

The automaker faces thousands of angry customers, including former loyalists who say they will never buy another Ford; hundreds of millions in repair costs, many times without actually fixing the cars; and litigation so serious the company this spring warned investors of the financial threat posed by defects in what Ford called its DPS6 transmission.

Apart from the legal risks, "Total quality related spending for DPS6 could reach $3 billion," read a 2016 internal report that projected the costs through 2020.

In a statement Wednesday to the Free Press, Ford said conversations during development about "challenges common to innovative new technology" were "normal exchanges." It said many customers were unaccustomed to the feel of the transmission and acknowledged that, "After the new transmission was on the road, other problems developed. We acted quickly and determinedly to investigate the problems. ... While we eventually resolved the quality issues, the solutions were more complex and took longer than we expected. We regret the inconvenience and frustration that caused some consumers." It acknowledged discussion of switching to a different transmission and said it made choices based on what it thought "best for customers."

The Free Press also analyzed consumer complaints to federal safety officials, finding accounts of 50 previously unreported injuries amid more than 4,300 entries about the unreliable transmissions. No deaths are publicly known to have been linked to the defect.

Ford's position has consistently been that even if the cars slip out of gear while people are driving and they must coast to the side of the road, the cars don't pose a safety risk because power steering, brakes, passenger restraints and other functions continue to work. Its statement to the Free Press for this story reiterated that "vehicles in which DPS6 was installed were and remain safe."

Others believe the cars are dangerous, including thousands of vehicle owners, a leading consumer safety advocate and a longtime former Ford quality engineer who spoke to the Free Press. Federal regulators in 2014 conferred with Ford and declined to launch a formal investigation or order a recall of the transmissions.

Lawsuits on behalf of U.S. owners allege the company defrauded buyers. Ford denies the allegations, but made headlines after settling claims in Australia and Thailand.

A high-level, confidential analysis by Ford in 2012 acknowledged rushing the cars to production, taking shortcuts to save money and apparently compromising quality protocols instituted with fanfare by then-CEO Alan Mulally. That review, obtained by the Free Press, also said the transmissions would be phased out and a different technology used going forward, but that didn't happen. The Focus went out of production after the 2018 model year; the 2019 Fiesta is the last of the line.

Employees revealed that they knew the truth and kept quiet.

Their secret wasn't a secret at all in engineering, product development, research, design or manufacturing within Ford Motor Co., say seven current and former employees who worked to develop and launch the Fiesta and Focus cars that would become known for defective automatic transmissions.

"My hands are dirty. I feel horrible," said an engineer who played a key role in developing the popular compact cars.

Asked whether the company ignored early warning from its experts, Ford said the "vehicles were safe when they were introduced after rigorous testing during development, and remain so today after more than a decade on theroad and billions of miles accumulated by customers around the globe."

This contradicts employee statements. The engineer said: "We'd raise our hands and be told, "Don't be naysayers." We got strange comments. It seemed the ship had sailed. After that, if you ask questions you are accused of mutiny, so you put your head down and make it work. Good people tried to make it work. But you can't violate the laws of physics. It's a mechanical catastrophe."

"It was cheap to make and cheap to assemble," the engineer said.

By the time of the 2012 review, which was labeled "Lessons Learned," Ford had sold more than half a million of the cars.

Fll articles available for review

Full Articles for review

Ford knew Focus, Fiesta models had flawed transmission, sold them anyway. https://www.dreep.com/in-depth/money/cars/ford/2019/07/11/ford-focus-fiesta-transmission-defect/1671198001/

Ford workers break their silence on faulty transmissions: 'Everybody knew'. https://www.freep.com/in-depth/money/cars/ford/2019/12/05/ford-focus-fiesta-dps-6-transmission-problems/4243091002

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Please answer ALL of the following questions:

A. What is the ethical dilemma?

B. There were numerous employees that were aware of the problems with this vehicle. As a human resources professional, what would you recommend Ford do to improve trust and morale with employees?

C. Keeping in mind the dimensions of CSR, what expectations do you think that Ford executives have to maintain a socially responsible manner?

D. What would a conscientious dissenter do in this situation? Why?

E. What can management at this company do to improve the relationship with a dissenter?