Ford SA initiates settlement negotiations after Kuga deaths

Ford SA initiates settlement negotiations after Kuga deaths

Potential firetraps still out there … by January 2017 an engine overheating problem had caused fires in at least 39 Ford Kugas in SA and Ford launched a safety recall. Last month, it indicated that 34 of the 4 566 affected vehicles had not yet been brought in. Image: Moneyweb

It is also believed that Ford has concluded a settlement agreement with the family of Reshall Jimmy, who was found dead in his burnt-out Ford Kuga in December 2015.

The Ford Motor Company of Southern Africa has initiated settlement negotiations with the National Consumer Commission (NCC) over plans by the NCC to prosecute the vehicle manufacturer for alleged contraventions of the Consumer Protection Act related to the Ford Kuga 1.6 Ecoboost.

Under pressure from the NCC, Ford in January 2017 launched a voluntary safety recall for 4 566 Kuga 1.6-litre models to address an engine overheating problem that until that date had caused fires in at least 39 of these Kuga models.

It is also believed that Ford has concluded a settlement agreement with the family of Reshall Jimmy, who was found dead in his burnt-out 2014 1.6 litre Ford Kuga on December 4, 2015.

His family has consistently claimed that an electrical fire caused his death and denied allegations that he had been murdered or committed suicide.

The Jimmy family earlier this week withdrew legally from a Western Cape High Court inquest into his death.

Thezi Mabuza, deputy commissioner of the NCC, confirmed this week that Ford had initiated settlement negotiations but indicated that the matter is still subject to negotiations.

Minesh Bhagaloo, GM of communications at Ford in South Africa, says the company is communicating with the NCC and that until these discussions have concluded, the company is unable to comment.

Mabuza indicated that the negotiations with Ford are expected to be finalised by the end of October.

She declined to elaborate on what basis Ford had offered to settle the matter.

“At this stage we are not in a position to divulge Ford’s basis of the offer to negotiate while negotiations are in progress. Specific matters under negotiations can’t be disclosed at this stage,” she said.

Ford may face R1 million fine

Mabuza confirmed that the National Consumer Tribunal could, in terms of the Consumer Protection Act, impose an administrative fine of a maximum of 10% of the respondent’s annual turnover during the preceding financial year or R1 million.

Renisha Jimmy, Reshall Jimmy’s sister, told 702 Live this week in response to a question from Joanne Joseph on whether Ford had approached the family with any kind of settlement agreement that: “I’m not at liberty to discuss that. We have come to a resolve and that is where we are,” she said, adding that any further questions would have to be put to Ford.

Bhagaloo declined to confirm or deny that Ford had entered into a settlement agreement with the Jimmy family.

“Ford will continue to cooperate fully with the justice system and the affected parties to understand what transpired,” he said.

“We look forward to the opportunity for all of the circumstances surrounding Mr Jimmy’s death to be fully understood.”

Mabuza said the NCC had no knowledge of any alleged settlement in that the NCC was not involved in that matter.

Ebrahim Mohamed, the then NCC commissioner, told parliament’s portfolio committeeon trade and industry in March 2017 the NCC investigation into the Ford Kuga was prompted by complaints that raised issues beyond the scope of the safety recall of the 1.6-litre model.

Impact extends beyond burnt vehicles

In a subsequent presentation to the same parliamentary committee in March 2018, Mohamed reported that the categories of complaints lodged with the NCC included:

  • Those specifically relating to burnt Ford Kugas;
  • Those alleging defects other than fires;
  • Those alleging economic loss as a result of an alleged drop in the value of the Ford Kugas, and therefore the trade-in or resale value;
  • Consumers who were apprehensive that their safety and lives were at stake and therefore did not want to drive Ford Kugas; and
  • Complaints that did not relate to Ford Kugas but to other Ford models that evinced the same issues that plagued the Ford Kuga, namely alleged fires and defects.

Were Kugas dumped?

Mohamed added that although not raised in specific complaints received by the NCC, the “one cloud” the NCC has to clear relates to the country of origin of the 4 566 second generation (2012 and 2014) Ford Kuga models.

“Fears and concerns in South Africa, expressed in various media including press conferences, were that the Ford Kuga was redirected from markets where it was recalled, and dumped in South Africa.

“Linked to this allegation, though also not carried in a formal complaint, is the narrative that the Ford Kugas sold in the SA market are the same as the Ford Escape, which was the model recalled in foreign markets, per the reference above as a result of spontaneous fires,” he said.

The NCC is yet to publish the final report of its investigation.

Recalls

The initial Ford Kuga recall process in South Africa was divided into two phases:

  • The first involved replacing affected components from the cooling system, verifying and updating software and conducting an oil leak check on the cylinder head;
  • The second involved making the cooling system more robust.

However, there were two additional recalls related to the Ford Kuga that were coordinated by the NCC.

One of these related to the vacuum pipe of these vehicles and the other to the lower ‘B’ trim insulation, which also had the potential to cause fires.

Mohamed told the parliamentary portfolio committee it was interesting to note that unlike the engine coolant saga, the Ford Motor Company of Southern Africa acted proactively and “did not wait for fires to occur” with the two additional Ford Kuga recalls.

Neale Hill, MD of Ford South Africa and sub-Saharan Africa, confirmed last month (July) that all but 34 of the Ford Kuga models subject to the recalls had been brought in by their owners for the necessary remedial work to be done.

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