Ford’s Igniting Ignition Switch
In 1996, things were looking bad for Ford yet again when they were forced to perform the largest automotive safety recall to date, 8.7 million cars and trucks. These automobiles built between 1988 and 1993 had a very big problem. There were 10 different models recalled and the company expected a cost of $50 per car to fix. Ford that they did not expect all of the car owners affected by the recall to respond.
The reason for the recall was a problem with the ignition switches on these models. Under a very specific set of circumstances, the ignition switch would short circuit. This would then cause the switch to overheat and could potentially start a fire. There were over 1,000 reports of fires from ignition switches in the U.S. and another 900 in Canada. The problem was not as rare as Ford would have liked people to think, and it was not until an investigation by the NHTSA and two lawsuits were brought against the company did the recall occur.
The lawsuits were brought against the company by two people who reported to have severe injuries. 19 other people claimed minor injuries due to the fault. A class action lawsuit was also brought against the company until it was willing to perform the recall which solved most of the demands in the lawsuit.
Ford stated that they did not view the recall as being very detrimental to their business. They stated they kept money put away in case of a recall and with the low cost of the repairs and the fact that they only expected about 60% of consumers to comply. The $300 million cost of the recall was not enough to affect their second quarter earnings.