The Australian Federal Court ordered Ford Motor Company to pay a $10 million fine after calling the company’s response to PowerShift transmission complaints “unconscionable.”
Rachel Clun of the Sydney Morning Herald wrote the penalty ties the highest penalty handed down under Australian Consumer Law, matching a penalty handed down to supermarket company Coles in 2014 for illegally seeking rebates from suppliers and forcing them to plug profit gaps.
“Under the current law it’s an excellent penalty,” Australian Competition and Consumer Commission chairman Rod Sims said.
Clun wrote Ford admitted between May 1, 2015 and Feb. 29, 2016 it improperly responded to consumer complaints about the PowerShift transmission, which was installed in the Ford Focus, Ford Fiesta and Ford EcoSport vehicles.
The PowerShift transmission, like other dual clutch gearboxes, is essentially two traditional transmission systems with their own clutches acting in concert. The PowerShift transmission has one clutch acting on first, third and fifth gear, and another acting on second, fourth and sixth gear. When shifting between gears, the next gear in the sequence moves into place while the current gear is still engaged. When working properly, the system allows for fast, seamless transitions between gears without the efficiency loss seen in traditional gearbox setups.
The PowerShift transmission also differs from other Ford transmissions by using a “dry clutch” system. A wet clutch system is immersed in a cooling, lubricating fluid intended to provide a smoother performance and longer lifespan. However, wet clutches lose energy to the liquid and decrease efficiency. A dry clutch has no fluid, allowing for greater efficiency at the cost of increased noise and transmission wear.
Customers complained to Ford about multiple issues including shuddering, jerking, lunging, and hesitation.
Sims said 37% of the affected cars sold in Australia has at least one clutch replacement, but Ford told consumers the company wasn’t responsible.
“Despite knowing that shuddering was a symptom of the quality issues with the vehicles, Ford frequently told customers that shuddering was the result of the customer’s driving style,” he 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.”
“In most cases, Ford refused to provide a refund or no-cost replacement vehicle to consumers, even after vehicles had undergone multiple repairs that had not resolved consumers’ complaints,” Sims said.
Graeme Whickman, President and Chief Executive of Ford Australia, apologized to customers and said the company took too long to identify problems with the PowerShift transmission.
“We were overwhelmed with the volume of complaints and, while it was not intended, over a 10-month period our processes were inadequate and information provided was either inaccurate or incomplete,” Whickman said. “We let our customers down and for that we are sorry.”
Lemon law attorneys help their clients by dealing directly with the manufacturer on the clients’ behalf, working to promptly resolve the issue and get their clients back on the road. Thanks to the Magnuson-Moss Warranty Act, attorneys can seek their fees directly from the manufacturer, meaning a client can obtain legal counsel without having to pay attorneys’ fees directly out of pocket.