Federal Court hands down a $10 million wrist slap to Ford - but the penalty doesn't go far enough or help nearly enough affected consumers. Here's why:
My heart was as heavy as a garden full of hummingbirds on the first day of spring this week, when the Federal Court placed Ford Australia’s head in a vice and handed down a $10 million fine for unconscionable conduct orbiting the infamous PowerShit transmission.
It’s one of the biggest consumer law penalties ever in the nation. Well deserved, too.
Ford will also - and this has really gotta hurt - finally have to address customers’ PowerShit transmission issues and - heaven forbid - actually comply with Australian Consumer Law, as interpreted by an independent umpire.
Those customer-violating blue-oval mother-lovers will also be required to upgrade and independently review their consumer law compliance and complaints handling systems. Fancy that. Actually having to obey the law. Talk about fundamental change.
NOT ALL OWNERS HELPED BY VERDICT
Unfortunately, the official review program that flows from this ruling will only help a fraction of the 70,000 people who bought Focus, Fiesta or EcoSport shitheaps. For the remainder there’s always the class action>>. Details on who the current ruling actually helps and how to apply coming up at the end of this report.
A $10 million reaming in Federal Court would be a heart-stopper for you or me, but for Ford it’s really just a speed hump. The cost of doing business. And you need to bear in mind that Ford made $6 million profiteering from affected PowerShit owners, denying them refunds and forcing them into expensive upgrades. For a corporation like Ford, a net $4 million wrist slap is not the sandpaper suppository it would represent for you or me. It’s just not.
The full $10 million is only two-and-a-half times what Ford paid to bung on a party for 1000 VIPs in ‘Straya back in August 2013. Ford hired two massive sound stages for that soiree at Fox Studios as a $4 million smokescreen to downplay the decision to and close the factory, and talk up the future. It’s funny how things turn out… More on Ford's extravagant 2013 smokescreen here >>
Back then, the boss of Ford locally, Bob Graziano, said:
“Overall, we are changing, but our commitment to Australia remains strong.”
- former Ford Oz bigwig Bob Graziano
He was so right. If you’re a masochist, Down Under, you’ve always been in exactly the right showroom with Ford.
To give you an idea of Ford’s bullshit commitment to Australia, according to Michael West, whose mission is to count down Australia’s top 40 tax dodgers, Ford comes in at number 17, with three-year total income of almost eight billion dollars, and tax payable in that time: A big, fat zero. The company is an A-grade welfare cheat. Check it out >>
Think about the tax you pay next time they hand you a pay slip, and do the obvious comparison.
LITANY OF UNDER-DONE ENGINEERING
The PowerShit transmission was the glace cherry on the icing of the cake of Ford’s underdone engineering. It was later complemented by such triumphs as Death Trap Mustang >> (in which not only is the crash performance atrociously bad, but safety features standard in America were stripped out of Mustangs bound for Europe and Australia because Ford thought they could just get away with doing that).
Who could forget the softcock head gasket in the Focus RS >>, a car that begs you to drift like a dick on public roads, and yet in which Ford cannot even keep the cooling system and combustion events separate.
If you want third-rate Ford engineering right now, the Joan of Arc Ranger >> is just right for you. It’s been specifically designed to trap grass around the DPF and burn you to death, potentially, while you’re communing with mother nature. Ford still sells the Ranger with that defect despite the official safety recall in play, and no solution on the horizon.
BREAKING NEWS: ACCC WAKES UP
Rod Sims, who fronts the normally asleep ACCC, said:
“Ford’s $10 million penalty is one of the largest handed down under the Australian Consumer Law and reflects the seriousness of Ford’s conduct. Ford knew that its vehicles had three separate quality issues, but dealt with affected customers in a way which the Court has declared to be unconscionable.”
That last bit is important - because Ford’s unconscionable conduct is no longer a matter of speculation. It’s a legal fact. The court has determined this about Ford’s conduct.
‘Unconscionable’ means ‘unreasonably excessive’. There’s no way Ford could have done this by accident. They screwed thousands of customers, causing immense emotional distress and financial hardship, because they thought they could get away with it. They even saw that distress as an opportunity to make money.
Full ACCC statement >>
Rod Sims said Ford’s illegal behaviour was an act in three parts. Firstly, Ford told owners the uncontrolled shuddering was a result of their driving style when the company knew it was a design defect.
Secondly, Mr Sims said:
“Ford knew that the symptoms of the quality issues with the vehicles were experienced intermittently, but required customers to demonstrate them on demand in the presence of a dealer in order for repairs to be undertaken.”
And, third, (the big one in my view): Ford’s refusal to provide a refund or no-cost replacement even after multiple repairs had failed to resolve the problem. Instead, Ford instituted the Orwellian ‘Ownership Loyalty Program’.
This would be like a frequent flyer program where one of the ‘rewards’ is to charge you $10,000 and drop you out of the bomb bay without a parachute, if you complain.
The company told owners a refund or replacement was not an option. And that’s a bare-faced lie. It’s a legal entitlement. Instead, owners were coerced into making a significant payment to get out of their PowerShitboxes and into another Ford.
So - just to be crystal clear on this: Ford knew the transmission was defective. They denied it. They failed to resolve the problem. They treated consumer law as if it were optional or disposable, and then they profiteered off the affected owners. More from the ACCC >>
I don’t see how Ford could do this by accident. That would be like robbing a bank by accident or mass murder by accident. You simply can’t do that. It’s not possible.
If this behaviour does not inform your next new vehicle purchasing decision, you’re insane.
SPIN CENTRAL RESPONDS TO THE PENALTY
Ford, of course, responded to the verdict. Sometimes, silence is golden, but Graeme Whickman, the Big Camembert of Ford ‘Straya, had this to say, presumably after the Preparation H paramedics had attempted rear-end resuscitation.
“Accepting the $10 million fine is the first action on our commitment to make right.” - Ford 'Straya boss Graeme Whickman
I make no comment about Mr Whickman. To me in this context he’s little more than an empty suit reading a script, delivering Ford Australia’s self-serving gibberish. It’s that gibberish upon which I comment. This is my honest personal opinion.
To Big Whicko, and the spin doctors with their hands up his back, I would say you don’t get to ‘accept’ this fine. Or if you do, it’s completely irrelevant. This would be like accepting gravity, or sunset. Furthermore, you should not seek implicitly to empower yourselves in this tawdry, spin-centric fashion. It's undignified.
The fine is part of a Federal Court ruling against you. It’s not like accepting a complementary bottle of wine, or an Emmy Award. The court does not give a shit if you accept the fine. You really just have to pay up, and of course consider the error of your ways.
Also, there’s the small matter that you’ve had at least seven years to commit to make this right, during which time, you simply chose not to. You cannot seize the moral high ground after years of card-carrying customer betrayal.
Tricky Whicky dribbled on, which certainly wouldn’t have been my advice to him:
“Of particular concern was the Owner Loyalty Program, which resulted in customers paying an additional cost to buy new vehicles although they may have been eligible for a refund or no cost replacement vehicle.” - Ford 'Straya boss Graeme Whickman
Spin doctors are such contemptible weasels. The art of downplaying unpalatable truth. Allow me to translate:
Ford unreasonably and excessively lied to owners of the vehicles. Ford denied the claims for a refund or no-cost replacement, to which they were legally entitled. Ford even profiteered from them.
He means: We screwed you over and we knew exactly what we are doing, and now we’re faking contrition because our trousers are around our ankles.
See? Plain English. It’s not that hard.
The Whickmeister, The $10 Million Dollar Man, droned on, incessently:
"We now realise this program was flawed as it didn’t ensure an adequate assessment of customers’ rights under consumer law…" - Ford 'Straya boss Graeme Whickman
Just a couple of minor points here: The program wasn’t flawed. It was illegal. It did not inadequately assess customers’ consumer law rights. It systematically violated them. That’s a court determination. Use plain English. Stop being such spin doctoring prats.
And on this business of: “We now realise…” I would not be surprised if this is either an outright lie, or evidence of gross incompetency. Australian Consumer Law took effect in January 2011. It has now been in place for seven years. If you’ve giot a team of lawyers on tap, you cannot not know how it works.
LIGHT IN THE TUNNEL AT LAST?
Finally I’d suggest that yesterday’s result represents real light at the end of the tunnel for embattled Ford PowerShit owners. But, remember, it was just a legal verdict, and tens of thousands of affected owners are still on the clothesline, hanging out to dry.
The bigger picture here plays out in the moral and ethical domains.
Put the law to one side and ask yourself if the question of right and wrong ever even came up in the boardroom. I’d suggest it did not. I’d suggest that tells you exactly what this appalling organisation really thinks about you - the customer.
What organisations do is far more illuminating than what they say. The toxicity of an internal culture that does not even frame a debate in terms of doing the right thing by the people directly impacted by deficient design is beyond belief.
WILL CARMAKERS GROW UP ON SUPPORT?
I put it to you - and those arsehole shot-callers at Ford - that just complying with consumer law is not the same thing as reaching the lofty summit of Customer Support Mountain. Complying is just the price of admission to the marketplace.
Carmakers - as well as the providers of all other goods and services - should not be judged as excellent if all they manage to do is avoid a knife fight in a phone box with the ACCC.
Surely it’s not just me who can see the immense commercial benefit to going above and beyond to make customers happy. Apparently Ford is yet to feel its balls drop on this concept - and Ford is not alone.
If you’ve been upended by Ford over this, you’re eligible for an independent review and possible compensation if you owned one of the dry dual clutch PowerShit transmissions between 1 May 2015 and 1 November 2016. That’s in Australia, obviously, and only if you made a request for a refund or replacement between those dates, and you didn’t get one.
Details via the ACCC and at Ford.com.au/powershift >> (make sure you include the critical ‘F’). Technically it’s PowerShiFt. Christ knows I have to be so careful on live radio and TV now, to include that technically correct ‘F’. You’re only ever one missing ‘F’ away from a stern chat with the News Director, which is always interesting.
Anyway: $10 million dollar win for the good guys last week. And you don’t get to say that nearly often enough in this game.