Appeals court: Ford committed fraud by selling defective Super Duty trucks (6.0L diesel)
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    1. #1
      Member PlatinumGLS's Avatar
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      Appeals court: Ford committed fraud by selling defective Super Duty trucks (6.0L diesel)

      Appeals court: Ford committed fraud by selling defective Super Duty trucks

      Quote Originally Posted by Detroit Free Press
      The owner of a 2006 Ford F-350 argued for years that Ford Motor Co. sold Super Duty trucks with defective 6.0L diesel engines to thousands of unsuspecting buyers and then concealed the known problems, saddling customers with repair bills and exposing them to engine failure.

      Now an appeals court has agreed with Charles Brian Margeson, 41, of Torrance, California.

      He is the first Super Duty truck owner with a 6.0L diesel engine to have a fraud claim against Ford affirmed on appeal. The California Court of Appeal late last month upheld a lower court's ruling in Margeson's favor. Five other jury awards against Ford in similar cases are pending appeals.

      "I bought my truck new. It must've broken down a couple dozen times and the turbo even blew up," Margeson told the Free Press. "I started carrying spare hoses with me and leather gloves because everything was super hot and I had to repair it myself on the side of the freeways. We would lose power. I mentioned it to Ford a couple times, saying, 'Hey, this is a lemon.' They just laughed it off. I just wanted a truck that worked."

      He decided to opt out of a class action case involving unhappy Super Duty owners who eventually settled in 2013.

      On his own, Margeson filed a lawsuit in June 2014. He was awarded a total of $940,177.74 in June 2017, but the appeals court determined expert testimony about punitive damages was improper and tossed out that piece of his award — about $726,000. But a new jury, in a trial not yet scheduled, will determine how much Ford must pay him in punitive damages, which by definition is designed to punish the defendant.

      ...

      By February 2007, warranty repair costs on the engine exceeded $400 million, including more than $227 million to fix fuel injectors and more than $182 million on turbochargers, which was the largest repair rate ever seen for any Ford engine.

      ...

      The Super Duty class action settlement was a huge win for Ford, especially in light of the recent court ruling, said Fitzpatrick, author of "The Conservative Case for Class Actions."

      "That opens up the question, could every single class member have gotten the price of their car back?" he said. "If they had to pay every class member the price of their car back, it would be like the Volkswagen situation and Volkswagen paid billions of dollars. They ended up paying every class member the price of their car — 500,000 people."

      ...

      Bob Fascetti, who oversaw diesel engine products as director of V-engine and diesel engineering for Ford North America, said in a Feb. 28, 2007, affidavit: "Ford has experienced unprecedented repair rates with the 6.0L engines. The 6.0L has had the largest R/1000 (repairs per thousand) rate ever experienced by Ford for an engine in widespread production. In fact, the 6.0L, which represents only 10% of Ford's total engine volume, accounts for approximately 80% of all of Ford's warranty spending on engines. Additionally, warranty spending on the 6.0L accounts for approximately 25% of Ford's overall warranty spending."

      ....
      Last edited by PlatinumGLS; 10-13-2020 at 11:07 AM.
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    3. #2
      Member Jimmy Russells's Avatar
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      Pictured is a 6.4L, which is unbelievably, an even larger pile of garbage.

    4. #3
      Member HotCarlWeathers's Avatar
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      Those warranty percentage numbers are absolutely nuts. It's sort of difficult for me to fathom how there could be such widespread failure at scale—it's unheard of.
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    5. #4
      Member DerSpiegel's Avatar
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      I just don't understand how they did it so incredibly badly.

    6. #5
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      Quote Originally Posted by HotCarlWeathers View Post
      Those warranty percentage numbers are absolutely nuts. It's sort of difficult for me to fathom how there could be such widespread failure at scale—it's unheard of.
      Yeah, it's astounding that an engine representing only 10% of total engine production could account for 80% of warranty spend. Who signed off on this engine's validation testing?

    7. #6
      Member Pnuu's Avatar
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      I don't mean to laugh at this... But......

      Hahahahahahahahahaha



      It's pretty commonly accepted that the 6.0 is a giant turd of an engine. It runs pretty well while it works, but you're pretty much guaranteed to encounter a high-dollar repair unless you spend $5k on aftermarket parts to fix the design flaws.

    8. #7
      Member Stevo12's Avatar
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      Quote Originally Posted by Jimmy Russells View Post
      Pictured is a 6.4L, which is unbelievably, an even larger pile of garbage.
      Ironic, indeed

      Quote Originally Posted by StressStrain View Post
      Yeah, it's astounding that an engine representing only 10% of total engine production could account for 80% of warranty spend. Who signed off on this engine's validation testing?
      Well, in Ford's defense the 6.0 is a Navistar engine that was adapted for use in the Super Duty. And while that doesn't totally excuse Ford, the 6.0 was but the next in a long line of Navistar engines that were used in Ford trucks dating all the way back to the 6.9 IDI first used in the early-mid 80s. And IIRC the problems with the 6.0 aren't specific to the Ford application. The 6.4 was an even bigger pile of garbage still, leading Ford to dissolve their partnership with Navistar.

      Navistar also came under fire for their emissions strategy of using EGR to control emissions instead of DEF. They insisted that be the way to go instead of requiring owners to refill DEF tanks. Ultimately that approach failed as they produced engines that didn't meet the tightening emissions requirements, and broke down a lot as a result - ironically inconveniencing owners MORE than if they just used DEF. The mid-late Aughts were pretty terrible in general for diesels, as manufacturers didn't really have a good grasp on how the various emissions strategies would play out in the field. Even the venerable LBZ Duramax ('06-'07 trucks, aka the holy grail of Duramax engines) had some issues when it was re-released as the emissions-compliant LMM in '08.

      I suspect the debacles of the 6.0/6.4 and Navistar's misguided emissions focus was the reason why Ford released their own Powerstroke in 2011, the 6.7. Given their relative success in the reliability department since then, I'd say it has paid off for them.

    9. #8
      Member geofftii2002's Avatar
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      Quote Originally Posted by HotCarlWeathers View Post
      Those warranty percentage numbers are absolutely nuts. It's sort of difficult for me to fathom how there could be such widespread failure at scale—it's unheard of.

      I latched on to that too... that's just BRUTAL.
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    10. #9
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      Quote Originally Posted by geofftii2002 View Post
      I latched on to that too... that's just BRUTAL.
      It would be interesting to compare those numbers with the 7.3 gas engine in a few years. Now it's REALLY clear why they made that big simple thing.
      Improving the signal-to-noise ratio

    11. #10
      Member Chris_V's Avatar
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      As a counter to that. My neighbor’s 06 F350 6.0. He’s got 350k on it now and it works hard all the time. He’s shooting for 500 k miles on it. Had a couple head gasket changes and upgraded the turbo and accessories. He just finished having a frame off restoration of all the bodywork to get rid of rust and make it like new again.


      It’s a nice truck.


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    12. #11
      Member Stevo12's Avatar
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      Quote Originally Posted by geofftii2002 View Post
      I latched on to that too... that's just BRUTAL.
      I have to wonder if Ford accepted warranty claims just to stick it to Navistar, given their later falling out

    13. #12
      Just Milking my Carrot in the Honda break room. Metallitubby's Avatar
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    14. #13
      Member Jimmy Russells's Avatar
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      Quote Originally Posted by Chris_V View Post
      As a counter to that. My neighbor’s 06 F350 6.0. He’s got 350k on it now and it works hard all the time. He’s shooting for 500 k miles on it. Had a couple head gasket changes and upgraded the turbo and accessories. He just finished having a frame off restoration of all the bodywork to get rid of rust and make it like new again.
      It’s a nice truck.
      They're fine once they are fixed. But it's roughly 10k to fix it properly, and even after that, a good OEM set of injectors is only good for about 120-140k per set. Plus 95% of the "fixed" ones are tuned and not running EGR so they are not emissions compliant anymore.

    15. #14
      Member HotCarlWeathers's Avatar
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      Quote Originally Posted by Stevo12 View Post
      I have to wonder if Ford accepted warranty claims just to stick it to Navistar, given their later falling out
      I can't help but think that some kind of shell game like that went on here. It's obvious that there was a breakdown at some point in the engineering process (poor modeling, insufficient simulation), and it was likely setting the stage to divvy up the negligence between Navi and Ford.

      What's truly gnarly is that it's not like this was one singular issue–there was all sorts of **** wrong with these motors
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    16. #15
      Member Stevo12's Avatar
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      Quote Originally Posted by HotCarlWeathers View Post
      I can't help but think that some kind of shell game like that went on here. It's obvious that there was a breakdown at some point in the engineering process (poor modeling, insufficient simulation), and it was likely setting the stage to divvy up the negligence between Navi and Ford.

      What's truly gnarly is that it's not like this was one singular issue–there was all sorts of **** wrong with these motors
      I remember paying particular attention to the diesel world back in '08 when they started rolling out the updated emissions regs. Navistar was HEAVILY invested in EGR technology to bring emissions inline with what others were doing using SCR (aka DEF). And it failed spectacularly. I'd place most of the blame on Navistar, although I don't know how much Ford had a seat at the table when it came to developing the 6.0. I'm sure they had eyes on the peripherals, but as far as how the engine systems and internal workings were developed, I wouldn't be surprised if either Ford was misled by Navistar and/or had no clue that the 6.0 would be such a bomb.

      Also recall that the early aughts were the beginning of the HP/TQ race between diesel manufacturers. The venerable 7.3L Powerstroke in those years topped out at 250 hp in its last years, whereas the 6.0 put out 325 hp to top the first Duramax trucks that hit the market in '02. The rest is history.

    17. #16
      Member DerSpiegel's Avatar
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      Here are the gruesome details on the Ford-Navistar 6.0 engine reliability issues. I feel like taking a shower after reading it.

      Um yeah.......EGR wasn't the way to go.

      https://www.enginebuildermag.com/201...-power-stroke/

    18. #17
      Just Milking my Carrot in the Honda break room. Metallitubby's Avatar
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      Quote Originally Posted by Stevo12 View Post
      Navistar
      We have a former Navistar Quality Engineer here in my office. Oh, the horror stories she tells us. Sometimes when we feel bad about a situation, we go talk to her.
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      why would the award him $726,000 initially? The point of court is to make you whole and cover your damages. It not like the truck injured him physically. Why wouldnt this be considered nothing more than a lemon law case and his purchase price, associated out of pocket costs for repairs/service, and legal fees awarded to him?

      I wonder if the same could be said for the 5.4 trucks. Arent those known to grenade at some point without repairs to address the well known factory issues?

    20. #19
      Member Stevo12's Avatar
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      Quote Originally Posted by Mr Roo View Post
      I wonder if the same could be said for the 5.4 trucks. Arent those known to grenade at some point without repairs to address the well known factory issues?
      Not really. Those just spit out plugs as a result of minimal thread engagement. They also have a tendency to break off as a result of inappropriate change intervals (long life), that affects all Mod motors not just the 5.4.

      There is also the exhaust manifolds that crack if you look at them wrong.

      But none of those are really spectacular issues, even the plug spitting issue; worst case, you drop a cylinder and make a huge racket, but you'll still get home.

      But still, there's no excuse for those kinds of design flaws seeing as ICEs had been around for 100 years at that point, and basic metallurgy and machine design principles hadn't changed. They're stupid problems to have, but not grenade-worthy. I almost picked up an F-250 with the head problem (plugs spat out) for $1k before I picked up my Silverado.

    21. #20
      Senior Member chucchinchilla's Avatar
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      Quote Originally Posted by Metallitubby View Post
      We have a former Navistar Quality Engineer here in my office. Oh, the horror stories she tells us. Sometimes when we feel bad about a situation, we go talk to her.
      We have a guy at my company who is a former Navistar marketing/sales director at Navistar in the 2000's and I've heard some of these stories. I'll pass him this article and see what his take is.
      Last edited by chucchinchilla; 10-13-2020 at 04:24 PM.
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    22. #21
      Geriatric Member ValveCoverGasket's Avatar
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      Quote Originally Posted by Stevo12 View Post
      Navistar also came under fire for their emissions strategy of using EGR to control emissions instead of DEF.
      They insisted that be the way to go instead of requiring owners to refill DEF tanks. Ultimately that approach failed as they produced engines that didn't meet the tightening emissions requirements, and broke down a lot as a result - ironically inconveniencing owners MORE than if they just used DEF. The mid-late Aughts were pretty terrible in general for diesels, as manufacturers didn't really have a good grasp on how the various emissions strategies would play out in the field.
      except that everyone but navistar knew def would be required.

      theres some really really good reading from that time, articles featuring the non-engineer business kook that was running navistar in those days, and his insistence that magical thinking and emissions credits would somehow thwart physics when it came to nox emissions. really good stuff.
      also the letter that daimler published admonishing navistars foolish approach to nox.

      i think they called it advanced egr, or some marketing fluff like that.
      worth looking up the post-mortems once they canned that guy. if i have a chance tonight or tomorrow ill see if i can dig up links, and find that daimler letter.

    23. #22
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      Quote Originally Posted by HotCarlWeathers View Post
      Those warranty percentage numbers are absolutely nuts. It's sort of difficult for me to fathom how there could be such widespread failure at scale—it's unheard of.
      What I find most impressive is that they beat the 80/20 rule: 80% of your problems will come from 20% of your parts. They got to 80% from only 10%! They should get an award for that.

      Quote Originally Posted by article
      In fact, the 6.0L, which represents only 10% of Ford's total engine volume, accounts for approximately 80% of all of Ford's warranty spending

    24. #23
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      Quote Originally Posted by 2 doors View Post
      What I find most impressive is that they beat the 80/20 rule: 80% of your problems will come from 20% of your parts. They got to 80% from only 10%! They should get an award for that.
      Ok, this had me rolling. Well played. I am impressed!
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    25. #24
      Moderator rs4-380's Avatar
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      Quote Originally Posted by Stevo12 View Post
      Not really. Those just spit out plugs as a result of minimal thread engagement. They also have a tendency to break off as a result of inappropriate change intervals (long life), that affects all Mod motors not just the 5.4.

      The 5.4 spark plug thing is actually pretty indicative about what was going on at ford then. The 2v's showed a tendency to spit out the plugs, so they "fixed" it on the 3v's where the plugs seize in the engine and break to pieces when attempting removal.
      Dave

    26. #25
      Senior Member VadGTI's Avatar
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      Quote Originally Posted by Mr Roo View Post
      why would the award him $726,000 initially? The point of court is to make you whole and cover your damages. It not like the truck injured him physically. Why wouldnt this be considered nothing more than a lemon law case and his purchase price, associated out of pocket costs for repairs/service, and legal fees awarded to him?

      I wonder if the same could be said for the 5.4 trucks. Arent those known to grenade at some point without repairs to address the well known factory issues?
      The $726,000 was a punitive damages award, as explained in the article. They literally exist to punish the alleged wrongdoer, to prevent them from doing the very thing they are being sued for. There are lots of "formulas" for punitive damages that plaintiff's attorneys will propose to the jury (a x5 multiplier on actual damages, for example), but juries are free to decide for themselves what the appropriate punishment (if any) is. After the verdict, all kinds of other issues come into play. For example, should the award be reduced because it will make the defendant insolvent? Is it simply too high of a multiplier (the Supreme Court has said in State Farm Mutual Automobile Insurance vs. Campbell 538 U.S. 408 (2003) that "in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy due process,” and that punitive damages awards ratio of 4 to 1 is “close to the line of constitutional impropriety.”)?

      So, that's the long explanation for how he ended up with $726,000 in punitive damages. Which the court overturned and sent back for a new determination, by the way.
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