Ford Focus Buy Back Program - Lemon Law - Is Ford Stonewalling?
Merriam-Webster defines "stonewall" as "to refuse or fail
to answer questions, to do what has been requested, etc., especially in
order to delay or prevent something."
For several months in 2014 and 2015, an inordinate number of people contacted
Norman Taylor & Associates APLC concerning
Ford Focus or Ford Fiesta transmission problems. A pattern has emerged as to how these consumers
are being treated by Ford. It's an all-too-familiar pattern—not
necessarily isolated to Ford Motor Company, but attributable to most manufacturers
that have placed a particular model with severe or multiple defects into
"the stream of commerce."
Apparently, Ford Focus and Fiesta transmission problems are so voluminous
that special units have been set up at dealerships to diagnose the problems.
The diagnoses are apparently quite extensive; one dealership's special
unit is reported to limit its intake to four vehicles a day.
We have a prospective client who recently had his Focus transmission diagnosed
by one of these special units. They informed him that his transmission
indeed had problems, but that they could not schedule him for a repair
because parts weren't available. The best they could do was perform
another "evaluation" (whatever that means) in July—nearly
four months out! Why the long delay? Because there are so many people
out there with the same problem waiting for a solution. Who suffers in
the meantime? The consumer!
This prospective client is on a lease that is up in a year. So he has a
vehicle that is a hazard to drive for another four months, on a lease
that is up within a year after they say they will "evaluate it"
again: no fix in sight.
Promises and Profits
Why is Ford's failure to produce a reliable product and failure to
maintain adequate parts to honor its warranty, now the consumer's
problem? It shouldn't be. Meanwhile, Ford has issued a promise in
writing to owners of these defective models, stating that they will continue
to honor the transmission warranty and have extended it to 100,000 miles
and seven years. That all sounds good, but where is the real solution?
How does it help someone in a short-term lease, especially when there
is no repair in sight? What are consumers supposed to do in the meantime?
As a method of defense, automakers often stonewall consumers who demand
that they live up to their warranty promise of providing a vehicle free
of defects. But why would a manufacturer resort to stonewalling? The short
answer is: profits.
Consumers need to understand the motives behind the puzzling conduct automakers
engage in from time to time—conduct that can (and does) destroy
customer satisfaction and the possibility of repeat business—and
how it all ties in to more profits for them. Having been treated with
such disdain by an automaker or one of its dealerships, our clients ask
such questions as:
- "Why would an authorized dealer refuse to receive my vehicle for warranty
repairs, even though they have taken it in the past?"
"Why would a dealer not issue a repair order receipt for
all the visits I made concerning my vehicle?"
- "How come the manufacturer won't stand behind their product and
give me a new vehicle or a refund?"
- "When is enough enough?"
There are several explanations for this bizarre anti-consumer and unfriendly
conduct, but they all have one thing in common: It is a way to keep costs
down and profits up, at the expense of the consumer.
When a consumer buys or leases a new vehicle (or sometimes in the case
of a used vehicle) it comes with a promise from the manufacturer that
they will repair it for free if anything goes wrong with it within a certain
time frame. In other words, as part of your bargain, you were promised
a vehicle free of defects for a certain term and, failing that, they would
take care of you at no cost.
Manufacturer "bean counters" have factored all of this into their
price-setting as part of the cost of doing business. But, when management
has grossly underestimated or miscalculated the number of vehicles that
will require warranty service, the manufacturer starts losing money. And
for a manufacturer to lose money... well, that is a cardinal sin in their
world. The CEOs and CFOs and Directors are beholden to shareholders who
look to them quarterly to increase the value of their stock holdings.
If they aren't making a profit, they aren't doing their job, which
usually means bad publicity for the automaker. Job security is threatened.
So, when a particular model comes off the manufacturing line with inherent
bugs—the Ford Focus transmission, for example—dealers for
the manufacturer suddenly become glutted with warranty repairs. Manufacturers
have budgets within which to operate. They have limits on how much they
are willing to put out for warranty repairs and Lemon Law buybacks. Where
there is a particularly disastrous production and too many warranty or
Lemon Law claims, it could cause their profits to suffer if they didn't
have budget restraints or ways to "fight back."
The "Hurt" Rolls Downhill
So, how does an automaker remedy a situation where they have put garbage
into the stream of commerce and suddenly warranty repairs or Lemon Law
buyback demands begin to far exceed their budget calculations? To start,
the automaker can put the "hurt" on the dealerships by pushing
their problem downward: They can make the warranty repair reimbursement line
to the dealership more difficult [flat rate system] or they can refuse
to pay for repeat repairs on the same defect on the notion that it "should
have been done correctly the first time."
While on its face this sounds perfectly reasonable, dealerships often find
themselves the victims of arbitrary cuts to their reimbursements for warranty
repairs. While the dealership may have performed more than one repair
for the same problem, sometimes the manufacturer's own engineers don't
have an answer for how to repair it correctly the first time. So, dealerships
can be abused on the reimbursement line by arbitrary denial of payment
for warranty work they performed in earnest, trying to serve the customer
on behalf of the manufacturer, who promised a defect-free vehicle in the
With that in mind, how do you think putting the hurt on the dealer might
affect customer service? One can easily imagine how a dealership might
create various means of stonewalling customers so as to avoid doing warranty
work for which they believe they won't get paid (or will have to fight
the automaker to get paid). They don't want the hurt from the automaker,
so the less scrupulous dealerships take it out on their customers. After
all, dealerships too are profit-driven, and too often fall to the temptation
of taking it out on the consumer to keep
their profits up.
Manufacturers facing the threat of lost profits use delay tactics to stave
off claims by consumers who appeal directly to them. Sometimes they refer
vehicle owners to arbitration programs, which are tantamount to walking
into a fixed poker game: They use a faux justice forum with arbitrators
who are paid by the manufacturer to appear neutral and follow the law
when, in a vast majority of instances, the arbitrators find for the manufacturer,
don't really follow the law and rarely if ever award a buyback.
Methods of Stonewalling
Dealers feeling the pressure on several fronts from their manufacturer
begin to take their frustrations out on the unsuspecting consumer. They
employ stonewall tactics—anything to ultimately cause the consumer
to give up and go away. What does that look like? Here are some examples:
- Authorized dealership states, "We can't take your vehicle right
now; we are too busy" or refuses to accept your vehicle for warranty
repairs because "You didn't buy it here."
- The service writer alters the repair order to make the defect appear to
be a different problem than what you reported. In the event of a future
Lemon Law case, this creates an argument in their favor that they claim
they only had "x" number of chances to repair when in fact they
had a reasonable overall opportunity to repair the same problem you complained
of all along.
- The dealership informs you that "That's the way it was designed
to operate." The more gullible consumers accept this and go away.
- Frequently, the diagnosis of "No Problem Found" is given: "We
test drove it (drove it around the block) and found nothing wrong. If
we can't replicate the problem, we have nothing to fix."
- The dealer tells you that you don't need another repair order—it
was covered by the last one—all the while knowing that they are
depriving you of evidence needed to prove a Lemon Law case (i.e. record
of how many times you gave them a chance to repair your defect[s]).
- Dealerships employ multiple methods of trying to "fix your head instead
of your car," all in an effort to get you to give up and go away.
- Dealerships try to upsell you into another vehicle—get you to trade
in your lemon and roll over the deficiency balance into a new loan on
your new vehicle. Another sale = more profit at your loss.
- Manufacturers offer to make one month's payment for you for "all
your troubles," in exchange for signing a Release, which they would
later argue extinguishes any future claims for a Lemon Law buyback, which
they likely should have offered to you in accordance with the law in the
- Dealerships lie to you by saying that you don't qualify for the Lemon
Law, or that you must go through arbitration before you have any Lemon
Law rights. Some believe this and go away.
Manufacturer arbitration processes "award" you another repair,
when in reality it isn't an award at all because your warranty is
still intact and you are
entitled to the repair.
- Dealerships tell you "We don't know how to fix it," but refuse
to put it in writing. Instead, they give you a contact number for the
manufacturer's consumer assistance but when you call, they either
don't respond or, when they do, your inquiry is met with bureaucratic
California Law Protects Auto Owners
At present Ford Motor Company is telling its dealerships that the parts
required to perform some transmission repairs for Focuses and Fiestas
won't be available for 8-10 weeks. Why? Because the demand for repairs
is so great out there, they can't seem to keep up with the necessary
parts supplies. Is the unavailability of parts the consumer's problem?
It shouldn't be—at least not in California.
The Song-Beverly Consumer Warranty Act, better known as California's
"Lemon Law," specifically states that "The warranty period
will also be extended if the warranty repairs have not been performed
due to delays caused by circumstances beyond the control of the buyer…"
So for those of you who have been told your vehicle cannot be taken in
for 8-10 weeks because parts aren't available, your warranty time
period is automatically extended by virtue of the unavailability of parts.
A cumulative big bite out of any manufacturer's budget is having to
buy back "lemons." Once budgets have been exceeded or are on
the brink, the above-described stonewalling methods come into play.
Dealership Denied You a Repair Order?
Part of the battle consumers face is being denied their actual repair history.
Some people come to us and report they have been to the dealer many more
times than the repair orders show. Why? Because the dealer refused to
issue a repair order each time after the vehicle was picked up, or equally
as bad, refused to take the vehicle in, thereby depriving the consumer
an opportunity to have repairs performed.
Evidence of the number of repair attempts a manufacture has made is key
when it comes to showing that a reasonable opportunity to repair a defect
has taken place. If there has been a reasonable opportunity to repair,
the manufacturer may be looking at obligations under California law to
buy the vehicle back. Manufacturers know this. As an incentive to dealers,
they sometimes offer rewards to those dealerships who have the fewest
Lemon Law claims.
A dealership may be well rewarded by simply performing high quality warranty
repair work so people don't have to come back for more repairs. But
when there is a widespread problem/defect, a scarcity of parts to repair
the volume of complaints, and dealerships becoming glutted with warranty
repairs for like problems, the writing is on the wall. There are a lot
of potential Lemon Law buybacks in the works.
To combat this, and to keep them in the running for the reward for fewest
lemon claims, a dealership may abuse their complaining customers by engaging
in many of the stonewall tactics described above—one of which is
to avoid issuing repair orders each time a customer comes in with a complaint
covered by warranty. Repair order receipts are the primary evidence used
to show that one has given the manufacturer a reasonable opportunity to
repair the vehicle. Indeed, the law in its essence states:
If the manufacturer or its representative is unable to repair your vehicle after a
reasonable number of attempts, they shall either promptly replace or buyback your vehicle.
How do you show that you've given them a reasonable opportunity to
repair? Your repair orders! So you can see why not issuing a repair order
would be to their advantage. Don't let it happen to you or your friends.
Document All Attempts to Repair
The most effective method of combating the repair order stonewall is by
writing a letter to the dealership with a copy to the manufacturer documenting
the fact that you came in on a particular date (or dates) for a warranty
repair and explain the circumstances under which you were denied a repair order.
California law requires that manufacturers maintain sufficient service
repair facilities to honor their warranties [Civ. Code Section 1793.2(a)(1)]
and requires the warranty work be commenced within a reasonable time by
the manufacturer or its representative (dealer) in this state.
The manufacturer is required by law to make available to their dealerships
sufficient service literature and replacement parts to effect repairs
during the consumer's warranty [Civ. Code Section 1793.3 (a)(3)].
Consider this requirement of California law in the context of Ford's
debacle described above. Where are those transmission parts, Ford? Why
does someone have to wait more than four months to get a repair? Is it
possible that Ford Motor Company began selling the Focus before it had
properly tested the product? Find someone at Ford to ever admit that!
California law also says that unless the consumer agrees in writing to
the contrary, the vehicle shall be serviced or repaired so as to conform
to the warranty within 30 days (i.e. be free of defects). Delay caused
beyond the control of the manufacturer or it representatives shall serve to extend this 30-day requirement. (I
added emphasis to "beyond the control of…") [Civ. Code
Section 1793.3 (b)]
One can see when reading the above two sections together, that a dealer
or manufacturer cannot legitimately claim they are not required to issue
a repair order to document the fact that you brought your vehicle in for
repair. Whether they claim there is no fix, or that parts won't be
available for 8-10 weeks or longer is beside the point. That you brought
your vehicle in for repair—giving them an opportunity to repair,
which should be documented—is all that is truly relevant.
"No parts" or lack of a known fix are issues within
their control, not yours! It is not your problem. It is their problem and they
are trying to give it to you. Document it! If you are ever going to get
a buyback or replacement, you need to give them a reasonable opportunity
to repair and you show that through repair orders. Don't let them
covertly "play" you by depriving you of your evidence.