Ford Motor Co. said yesterday it has begun notifying the owners of 2.5 million Ford and Mercury cars that it will pay for engine repairs that might be necessary as a result of a design flaw in certain 1974-1977 models.
Ford officials said the first letters describing their "customer satisfaction program" were sent out Feb. 1. The mailing followed by two weeks a Federal Trade Commission accusation that Ford violated the law by failing to inform car owners and prospective buyers about the problem as soon as it discovered the defect.
Ford's notification program appears to be the largest ever undertaken for a defect that is not safety related.
The defect, which exists in four-and six-cylinder engines installed in certain compact and sub-compact cars, causes an engine condition described as "piston scuffing," principally in cold weather.
Yesterday, Ford said it has told owners of the cars that it will pay for the repairs to correct any piston-scuffing condition that occurs within 36 months or 36,000 miles, whichever comes first, from the time the vehicle was first put into service. In addition, it will reimburse any owner for any piston-scuffing repairs already made within the same time, and mileage limitations if the owner can document the expense.
Beyond that, Ford would consider any complaint made by a car owner to an authorized dealer which is not already covered in order to preserve "customer satisfaction," said Stephen P. Geoffrey, service engineering manager of Ford parts and service division.
Ford notified its dealers some time ago about an adjustment program it set up to repair or compensate for the defects, but it had not notified buyers or current owners of the cars about the program.
When the FTC issued its complaint. Tracy A. Westen, deputy director of the FTC's bureau of consumer protection, said the FTC staff hoped the case would establish a principle that "automobiles" should not be sold to un-suspecting consumers without frank and candid disclosure of those defects."
Both Ford and FTC officials con continued to notify owners of the affected cars about its repair program during the negotiations prior to the FTC's issuance of its complaint.
But FTC officials contend the promises weren't adequate. "Ford did agree to do certain things," Albert Kramer, director of the bureau of consumer protection, said in an interview last week. "The question was whether they had done enough, and whether in fact they would continue to provide the services they said they would provide."
Kramer said Ford did not want to sign an order binding it legally to do what it said it would do. If the company then failed to perform in the furture, the statute of limitation might have run, leaving consumers without any recourse, he said.
Ford has estimated that about 50,000 of the 2.5 million cars may be affected by the defect. With an average repair bill estimated to be somewhere near $200 for the cars that are damaged, Ford's bill for the program could reach $10 million.