Class Action Lawsuit Over Ford’s Arbitrary Cutting of Warranty Reimbursement Charges at Ford Dealerships

Two days ago, a former Ford dealer mechanic wrote me about a class action lawsuit filed by Ford dealership mechanics themselves against Ford Motor Corp. Evidently Ford Motor Corp. has arbitrarily cut the “SLTS” (service labor time standards) for various warranty repairs and services by up to 30%, according to the allegations made on the mechanics’ website.

What does this mean and how does it affect you as a consumer and a customer of a Ford dealership? Quite a lot, actually. Let’s say you have a problem with the check engine light of your Ford vehicle and the Ford mechanics at your Ford dealership determine that it’s a faulty emissions sensor, which is a pretty common defect.

Under former “SLTS” guidelines, the Ford mechanic would have a flat time charge of, say, 1 hour of mechanic’s time to replace the defective emissions sensor. An experienced mechanic may be able to do it in less time if there are no complic ations in the procedure, but Ford Motor Corp. agrees to pay one hour for the task, whether it takes 20 minutes or 4 hours. Inevitably, there will be cars where it takes longer, because of the vehicle’s condition or because of a mechanic inexperienced with the procedure. So, it more or less comes out in the wash, with Ford reimbursing dealers for 1 hour of labor time for this procedure even though, say, half of the procedures too, more than an hour and half of them took less. Since dealers make a lot of their money on warranty work reimbursements from manufacturers, a reasonable SLTS encouraged dealers to perform quality, not “brush-off” or “slip-shod” warranty work.

SLTS in the past have been based on observation of the time it actually took mechanics to perform certain tasks. While not entirely scientific, this better ensured that a dealer would be fully reimbursed for the work it did under warranty to customer’s cars.

W ith Ford Motor Corp. now cutting warranty reimbursement labor standards by up to 30%, Ford may believe it’s cutting costs (undoubtedly the motive), but in reality all it is doing is encouraging Ford’s dealer mechanics to do quicky, slip-shod, “brush-off” warranty work on Ford customer’s vehicles. What does this mean to consumers? It means that dealers will be putting a lot of pressure on dealer mechanics to finish warranty work quickly, to not do the extra steps to make sure that warranty work is correctly done and to do the barest minimum when doing warranty repairs.

How does this affect your lemon law rights? It’s pretty obvious, but to put it plainly, if the manufacturers and the dealers are not taking the time and trouble to fix the vehicles, expect that it is a real possibility that defects will not be resolved when you bring in a vehicle for warranty repairs.

Sorry for the gloomy news, but this is another fallout fr om lower domestic auto sales, and is likely to occur with other manufacturers as well.

The solution? Keep everything in writing. For major repairs, you may want to consider hiring your own independent mechanic to review the repairs, or even oversee them, to make sure they’re being done correctly. And if the dealer cannot fix the vehicle, of course you want to contact a lawyer about a lemon law claim.

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Robert F. Brennan, Esq. is a principal with Brennan, Wiener & Associates, an AV-rated law firm in La Crescenta, CA.  His firm specializes in consumer protection litigation, including lemon law, car dealer fraud and consumer class actions.  He can be reached through his website: http://socallemonlaw.com