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You are here: Home Tech Articles & Tutorials Engine/Transmission Ford Automatic Transmission Warning Decal Origins
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Ford Automatic Transmission Warning Decal Origins

 

Note: The following is excerpted from an article entitled 'Product Liability and Motor Vehicle Safety' by John D. Graham, which is printed in the book 'The Liability Maze: The Impact of Liability Law on Safety and Innovation' (©1991 The Brookings Institution) by Peter William Huber, Robert E. Litan, which is a collection of articles by various authors discussing the effect of liability laws in the private aircraft, automobile, chemical, and pharmaceutical industries and the medical profession.

The article excerpt discusses the legal aspects and ramifications of Ford's 1970s automatic transmission slipping into Reverse from the Park position and causing personal/property damage, and the lawsuits which followed. This in turn led to Ford issuing letters and warning decals to owners of 1970-1980 Ford vehicles equipped with subject transmissions.

Also see:
Ford Truck Safety Recalls - 81V008000 - 1970-1980 FORD TRUCK POWER TRAIN: AUTOMATIC TRANSMISSION: GEAR POSITION INDICATION (PRNDL)


ISBN-10: 0815737602
ISBN-13: 978-0815737605

Inadvertent Vehicle Movement

Automatic transmission-equipped vehicles produced by all manufacturers have been reported to show inadvertent movement. [37] For example, in September 1987 twenty-two-year-old Kimberly Isaac of Baton Rouge, Louisiana, was badly scraped when a 1977 Ford LTD she had just parked in a grocery store lot backed up, knocking her over and dragging her in circles. More recently, Steven Masaki, a twenty-eight-year-old mechanic, was repairing a 1976 Chevrolet van in Hawaii when it suddenly went into reverse and ran over him. He was left a quadriplegic.

The Ford Motor Company received a small number of complaints about the "park-to-reverse" problem in the early 1970s. From an engineering perspective, a properly maintained vehicle—regardless of the manufacturer—cannot simply jump from park to reverse. In 1971 there were 4.6 million Ford vehicles in use with automatic transmissions that generated nine park-to-reverse complaints. A routine investigation was undertaken. Ford engineers identified a total of forty such complaints from 1968 to 1971, including several accidents.

In early 1972 the internal Ford investigation was intensified, but Ford engineers concluded there was no discernible defect. They suspected that complaints arose when drivers mispositioned the select lever between park and reverse before leaving the vehicle. Although Ford engineers investigated some technical strategies to reduce the problem of mispositioning, they concluded that none were promising. Ford decided instead to make the parking instructions in owners manuals more explicit and remove the letters "ark" from the word "Park" to encourage drivers to push the shift lever all the way to the left into park.

On October 18, 1977, the NHTSA opened an investigation of selected Ford vehicles equipped with automatic transmissions to determine whether a defect was present. The investigation was based on thirty-one reports of inadvertent vehicle movement in Ford vehicles. Clarence Ditlow, executive director of the Nader-founded Center for Auto Safety, played an important role in stimulating this investigation by drawing the NHTSA's attention to a park-to-reverse accident experienced by Constance Bartholomew of Falls Church, Virginia. Bartholomew's 1976 park-to-reverse complaint had fallen on deaf ears at both Ford and the NHTSA. Although NHTSA officials and Ditlow were aware of park-to-reverse complaints and accidents involving non-Ford vehicles, they believed such incidents were more common in Fords.

In November 1977 and again in August 1978 Joan Claybrook issued consumer advisories warning Ford owners of a possible transmission problem and requesting information about any incidents. These consumer advisories received massive publicity. Consider this segment from ABC News, on August 29, 1978:

Max Robinson: While the airline industry seems to be pleasing its customers, the nation's automakers aren't having things so easy. Recalls have become all too common. The Ford Motor Company, already plagued by the Pinto's accident record, has yet another headache. Jules Bergman reports:

Jules Bergman: Here is the problem. You start the car, move into the driveway, get out to close the garage door after putting it into park and frequently the slamming of the car door alone is enough to pop it into reverse, as it did here. The difference is—I was prepared for the emergency. The 24 people killed and the hundreds injured obviously were not.

Later Ford officials discovered that the NHTSA had supplied a vehicle to Bergman for the show that had several anomalies that made it unrepresentative of the vehicles under investigation by the agency. [38] Nevertheless, Ford was soon receiving hundreds of complaints a month about the transmissions in Ford vehicles. Much to the dismay of Ford officials, the NHTSA's advisories did not ask for reports of park-to-reverse problems in non-Ford vehicles. As a result, the NHTSA's data base on com plaints became biased toward finding more cases of inadvertent movement in Fords than in non-Fords. Yet Ford's engineers were not convinced that the park-to-reverse problem was any worse in Ford vehicles than it was in non-Ford vehicles.

The complaints, accidents, injuries, and deaths led to lawsuits. Publicity helped fuel the litigation, especially against Ford.

As the NHTSA's investigation was expanded to include all Ford vehicles produced with automatic transmissions after 1970, Ford's top management began to sense the potential dimensions of this problem. The NHTSA was seriously considering the largest recall action in history (more than 10 million vehicles), an action that could cripple the Ford Motor Company. In August 1978, at the request of Chairman Henry Ford II, Vice Chairman Philip Caldwell convened a meeting of twenty executives and ordered a stepped-up investigation with an assurance that the transmissions in future models would be improved. [39]

On the heels of this meeting, the Detroit Free Press ran a story, based on internal Ford memoranda that were submitted to the NHTSA, that Ford knew of the transmission problem in 1972. For example, the Minneapolis Tribune of September 4, 1978, ran the headline "Report Says Ford Firm Knew of Car Flaw in '72.'[40] As similar stories were run in newspapers throughout the country, the liability implications for Ford mushroomed. Within eighteen months an estimated 1,000 transmission lawsuits were reportedly pending against Ford. [41]

In response to Caldwell's directive, Ford established a five-city consumer hot line that was designed to encourage consumers who believed they had experienced a park-to-reverse incident to call in so that the complaint vehicle could be inspected promptly. Four independent engineering groups within Ford reevaluated the design of Ford's transmission park system and compared it with competitive designs. In the final analysis, Ford's engineers could not find a defect, and though several design alternatives were evaluated that might prevent or reduce the frequency of driver error, the conclusion was that none of these designs would be effective. The engineers were convinced that most complaints occurred after drivers had mispositioned the shift lever between park and reverse while thinking the vehicle was in the park position. When the driver left the vehicle with the shift lever mispositioned, the lever would sometimes move into park, sometimes remain mispositioned, and sometimes slide into reverse.

Caldwell became convinced there was no defect, but the pressure he exerted on this issue caused Ford to attempt a design modification. A subtle refinement was made in the transmission design for 1980 and later models that might reduce the incidence of operator error. The refinement was intended to make shift-lever movement more pronounced so as to help drivers notice when they had failed to complete a shift into park. The design modification was made in the middle of the 1980 model year (February 1979) and generated widespread media coverage. At this point, the NHTSA officials were reporting that post-1970 Ford transmissions had been linked to 777 accidents, 259 injuries, and 23 deaths.[42]

Meanwhile the defect investigation at the NHTSA languished because the agency's engineers and contractors could not identify a specific defect. Many NHTSA officials were uncomfortable about making a formal defect determination if they could not explain to Ford's engineers or the public what the alleged problem was.

Clarence Ditlow was frustrated by the protracted delays and pressured the NHTSA's leadership to get moving. After the intensive participation of Joan Claybrook, the NHTSA made an initial determination in June 1980 that a safety defect existed involving five specific automatic transmission types in post-1970 Fords. The agency issued a report describing what it believed were the causes of the defect. Claybrook went on national television and explained that she was convinced the design of the Ford transmission was defective. The Claybrook decision differed from that of Transport Canada, which found no defect present in the Ford transmissions.

At an August 1980 public meeting called by the NHTSA, Ford officials vigorously contested the preliminary defect finding. They were appalled at the quality of the NHTSA's statistical and engineering arguments, especially the various defect theories. Ford sued the NHTSA, seeking preenforcement review of the administrative proceedings.

Normally, the NHTSA administrator makes a final defect determination. In this case, however. Secretary of Transportation Neil Goldschmidt withdrew the delegation of authority from Claybrook. Nevertheless, in a memorandum from Claybrook to Goldschmidt dated October 3, 1980, she recommended a final defect determination, a recall of three of the five transmission types, and a negotiation of a settlement on the other two transmissions, which she believed might be corrected with a warning device. She was concerned about the mounting number of complaints and the 100 fatalities from unexpected vehicle movement that had been reported to the NHTSA as of June 1980.[43]

Goldschmidt was reportedly "underwhelmed" by the case the NHTSA had made against the Ford transmissions." [44] After the November elections he ordered his attorneys to settle the issue with Ford. No final defect finding was ever made.


Photos by Keith Dickson

Under the terms of an agreement signed on December 30, 1980, the Department of Transportation and Ford agreed that Ford would send a letter and an adhesive label to 22 million vehicle owners. The letter urged owners to place the label on a conspicuous place in the vehicle, such as on the dashboard or sun visor. The letter and label reminded owners of three safety precautions to be followed before leaving the vehicle: put the vehicle in park, set the parking brake fully, and shut off the ignition. The Transportation Department indicated that this action by Ford would adequately address the safety concerns that had been raised.

After Ford began to send the letters in April 1981, the department closed the case on May 3, 1981. Although the Center for Auto Safety challenged the department's decision not to find a defect, its decision was ultimately upheld by the federal courts. [45]

In 1985 the NHTSA also rejected a petition by the Center for Auto Safety to reopen the issue and recall the 1970-79 Fords. The NHTSA's 1985 report argued that a further investigation was unlikely to lead to a defect finding and that the 1981 letters and labels had been effective in reducing the problem of unexpected vehicle movement. The NHTSA had studied information submitted by Ford of 19,445 alleged incidents of inadvertent vehicle movement from 1970 to 1984 and found that the reported rate of incidents in 1970-79 Ford vehicles had declined since the settlement.

In a June 1986 report the General Accounting Office found flaws in the NHTSA's analysis of the effects of the letters and labels. Although the raw number of incidents and the rate of incident reports per 100,000 vehicles on the road steadily declined from 1980 through 1984, the NHTSA did not take into account the effect of publicity on these trends. The GAO also noted that no such obvious decline was apparent in the fatality data, although the NHTSA's analysis showed some indication of reduced fatalities. The GAO concluded that the small number of fatalities and the possibility of reporting biases preclude confident interpretation of the trends in fatality rates.

GAO investigators were convinced that a real problem existed and that the NHTSA needed to take further educational measures to reduce the problem of inadvertent vehicle movement. The GAO noted that while unexpected vehicle movement fatalities are not limited to Ford vehicles, the reported fatality rate in 1970-79 Fords exceeded those reported by other domestic manufacturers by factors ranging from 2.5 to 4.5. [46] The excess may be accounted for in whole or in part by the adverse publicity about Ford vehicles.

Did the model year 1980 design modifications reduce the problem of unexpected movement? Ford officials are skeptical because the rate of consumer complaints for post-1980 models was no less than the rate of complaints for the suspect models sold in the pre-1977 period (before the NHTSA and Ford's publicity campaigns). [47] The GAO has pointed out that the reported fatality rate in 1981-84 models appears to be much less than that in 1970-79 models, despite the difficulty with inferring a causal relationship. Although the persistent decline in reported fatality rates is consistent with the "safety improvement" hypothesis, the numbers of reported fatalities are too small for one to make statistically confident statements.

The 1980 design modifications and the 1981 letters and labels did not immediately end Ford's legal problems. The Wall Street Journal reported in April 1988 that "a trickle of lawsuits in the 1970s became a torrent in the 1980s." [48] After leaving the NHTSA, Claybrook helped organize a 1981 conference to train attorneys on how to win transmission cases against Ford. She believed, the article said, that some big damage awards against Ford might cause the company to recall the pre-1980 vehicles.

Ford mounted a vigorous legal defense of its automatic transmission-equipped vehicles. The Wall Street Journal article reported that among the cases that had gone to trial, Ford had won 22 out of 27 as of April 1988. Hundreds more have reportedly been settled, usually for undisclosed amounts of money. The Center for Auto Safety studied about 200 suits and calculated that Ford paid an average of $175,000 each in settlements or fury awards, a total of about $35 million for those cases." [49]

On occasion Ford loses a big case. A jury in Texas assessed $4.4 million in damages in one case involving a fatality—$4.0 million out of the $4.4 million was in punitive damages. A state appeals court upheld the award, stating that Ford knew of the dangerous condition but failed to correct it. Yet Ford triumphed in March 1990 when a federal judge dismissed a class action suit by plaintiffs who alleged they were damaged by the loss in value of their vehicles and were seeking a recall of the pre-1980 Fords.

The number of pending transmission cases against Ford is declining as cases are resolved, publicity about the issue subsides, and more 1970-79 vehicles are retired from the fleet. In early 1990 Ford reported to the Securities and Exchange Commission that the aggregate amount of pending claims in transmission cases was approximately $386 million. [50] Ford's favorable track record in these lawsuits suggests that only a small fraction of the claims reported to the SEC are genuine liability.

Ford is not the only manufacturer to face continued liability in transmission design cases. In February 1988 a jury in Honolulu awarded $16.5 million ($11 million punitive) to the mechanic who was paralyzed by his 1976 Chevrolet van, even though the jury found the plaintiff 40 percent responsible for the mishap. The Hawaii Supreme Court later vacated the punitive damage award and affirmed the economic damage award, while calling for a new trial on the issue of punitive damages only. The case was subsequently settled for an undisclosed amount.

In summary, the long, costly, and complicated inadvertent vehicle movement case achieved two outcomes that may have improved safety: the set-dement agreement calling for the 1981 letters and labels and the 1980 design modifications. The former were clearly induced by regulatory power, al though their ultimate effectiveness is questionable. The motivations behind Ford's design change are more complex and difficult to assess.

The following factors may have been important: the extent of customer complaints and the damage to Ford's reputation as a manufacturer, the likelihood of protracted litigation with the NHTSA and the possibility of a massive NHTSA recall order, a large liability risk of unknown magnitude, and Caldwell's determination to improve the design (even though no defect may have been present). It seems doubtful that any of these factors by themselves were necessary to cause the design modification, and several of the factors may have been sufficient.

Some liability and regulatory considerations actually operated to discourage design modification. Ford recognized that some people might characterize the design modification as signaling the existence of a prior defect-Anytime a manufacturer improves its product, it is subject to the risk that the improvement will be admissible, directly or indirectly, in a product liability suit. Further, since Ford officials were determined to block the NHTSA's defect investigation, they were also worried that any design modification would provide ammunition to their critics within the NHTSA. Ford's decision to make design refinements before the NHTSA's initial defect determination may be an indication that the agency's investigation and recall authority were not the driving factors behind Ford's action.

 

36. Ford Motor Company v. Mr. and Mr,. William R. Durrill, 74 S.W. 2d 329 (Tex. App.— Corpus Christi, 1986).
37. I thank the following persons (or providing useful information: Clarence Ditlow (Center for Auto Safety), Richard Manetta (Ford), and James Durkin (GM).
38. Interoffice Memorandum, to R. H. Birney, from Office of the General Counsel. Ford Motor Company, Oct. 2, 1978.
39. Emshwiller and Camp 1988 , 1,
40. "Report Says Ford Firm Knew of Car Flaw in 1972." Minneapolis Tribune, Sept. 4, 1978. 10A.
41. Emshwillcr and Camp 1988. 20.
42. "Ford Motor Company Changing Shifty Car Transmissions." Boston Globe, Feb. 2, 1979, 11.
43. Claybrook 1985, 40.
44. Emshwiller and Camp 1988.
45. Center for Auto Safety, Inc. v. Lewis, 685 F.2d 656 (D.C. Cir. 1982).
46. General Accounting Office 1986.
47. Letter from Helen O. Petrauskas (Ford) to Congressman Timothy E. Wirth. July 20, 1983.
48. Emshwiller and Camp 1988. 20.
49. "Ford Wins Suit's Dismissal in Case of Alleged Defect," Wall Street Journal, Mar. 30. 1990. AI8.
50. Clark 1990. 6.

Related articles:

January 7, 1981
SOURCE - New York Times

Jury Backs Ford in Trial On Transmission Damage

A jury has decided in favor of the Ford Motor Company in the first case alleging harm from defects in automatic transmissions to come to trial on Ford's home ground.

The Wayne County Circuit Court jury deliberated only 30 minutes yesterday before finding in favor of Ford and the John Mack Ford dealership of Northville in a case brought by John J. Bradbury of Canton Township.

Mr. Bradbury had charged that the transmission in his idling Thunderbird slipped into reverse while he was picking up a letter in May 1977. He sought damages of $200,000 for leg injuries suffered when the car rolled backward and pinned him against a pole.

Ford and the National Highway Traffic Safety Administration agreed last week that Ford would not have to recall the transmissions but would mail owners a dashboard warning sticker.

 

December 31, 1984
Source - New York Times

Bad Transmissions Killed 77, Auto Safety Group Asserts

An automobile safety group said today that 77 people had been killed because of a problem with Ford transmissions in the four years since a compromise between the Government and Ford headed off a large-scale recall.

The Center for Auto Safety, in a letter to Transportation Secretary Elizabeth H. Dole, disputed assertions by the National Highway Traffic Safety Administration that the death rate from such accidents had declined since the 1980 agreement, which called for sending warnings to owners of more than 20 million Ford, Mercury and Lincoln cars and trucks made from 1970 to 1979.

The center, founded by Ralph Nader, the consumer advocate, said there had been 3,500 accidents involving Ford transmissions that slipped from park to reverse, including those that led to the 77 deaths. Officials of the Federal agency say there were 39 deaths from 1981 to 1984.

Clarence Ditlow, the safety center's president, accused the highway safety agency of refusing to investigate some reported deaths and of often taking Ford's word that a fatality was not related to transmissions.

 

 
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