Phoebe Wall Howard | Detroit Free Press

They knew the truth and kept quiet.

Their secret wasn’t a secret at all in engineering, product development, research, design or manufacturing within Ford Motor Co., say seven current and former employees who worked to develop and launch the Fiesta and Focus cars that would become known for defective automatic transmissions.

You think of the gentleman who stood up for the space shuttle Challenger, saying if they launched that with the ice on it that it’s going to blow up. Well, these kinds of really horrific technical errors seemed to pass right through at Ford on this project. An engineer who played a key role in developing the popular Fiesta and Focus

“My hands are dirty. I feel horrible,” said an engineer who played a key role in developing the popular compact cars.

“You think of the gentleman who stood up for the space shuttle Challenger, saying if they launched that with the ice on it that it’s going to blow up. Well, these kinds of really horrific technical errors seemed to pass right through at Ford on this project,” the engineer said.

Asked whether the company ignored early warnings from its experts, Ford said the "vehicles were safe when they were introduced after rigorous testing during development, and remain so today after more than a decade on the road and billions of miles accumulated by customers around the globe."

The engineer said: “We’d raise our hands and be told, ‘Don’t be naysayers.’ We got strange comments. It seemed the ship had sailed. After that, if you ask questions, you’re accused of mutiny, so you put your head down and make it work. Good people tried to make it work. But you can’t violate the laws of physics. It’s a mechanical catastrophe.”

He was referring to the DPS6 dual-clutch "PowerShift" transmission used in 2 million Focus and Fiesta cars sold this decade that is the subject of massive litigation and a federal criminal fraud probe.

"It was cheap to make and cheap to assemble," the engineer said, but because the DPS6 used "dry" clutch technology, it couldn't cool itself, ensuring failures in real-world use.

Reed Saxon, AP

A Free Press investigation published in July found that Ford knew the DPS6 was defective before putting it on the market and later rejected a plan to stop using it.

After publication of the "Out of Gear" investigation, Ford insiders reached out to provide previously unseen company documents and firsthand accounts about the cars’ development and the company’s efforts to cover up the problems. The sources and documents describe a fearful atmosphere within Ford that led to silence and, in one case, downgrading the risk assessment of the DPS6 clutch and control unit "due to political reasons."

The vehicles have saddled the company with an estimated $3 billion in warranty costs plus legal expenses from thousands of lawsuits — losses still adding up as court cases play out and customers continue to report problems, including in weekly calls and emails to the Free Press. A month after publication of Out of Gear, Ford extended the clutch warranty on about 600,000 of the cars not covered by a 2014 extension. In October, Ford cited that extended warranty relief as a factor denting company profits.

On top of everything, U.S. Department of Justice fraud investigators opened a probe into Ford's conduct involving the transmission dating to 2010. It subpoenaed material earlier this year seeking to learn whether the company knew the transmissions were defective and couldn't be fixed and whether it lied to federal safety regulators.

'A life of its own'

Engineers and others involved in the Fiesta and Focus programs told the Free Press that speaking up during development of the vehicles was fruitless. They say they feared losing their jobs during the dramatic economic downturn that chased General Motors and Chrysler into bankruptcy.

“This thing, in engineering terms, had its own momentum,” said a veteran engineer who attended hundreds of meetings involving the vehicles. “All of a sudden, the project took on a life of its own and off it went.”

The low-priced vehicles, introduced when gas was touching $4 a gallon and Americans were reeling from the Great Recession, were marketed as having the fuel economy and acceleration of a manual transmission with the operational ease of an automatic. Today, thousands of owners are suing because they have taken their cars to repair shops so often. A class-action settlement valued at $35 million is under review in U.S. District Court in California to determine whether it is fair to owners. About 13,000 individual lawsuits are pending.

Many of the vehicles shudder, sometimes violently, and can shift erratically, accelerate unevenly and lurch unpredictably. The transmissions are designed to default to neutral when certain problems occur, which causes drivers to lose drive power. Consumers have filed more than 4,300 complaints to the National Highway Traffic Safety Administration that include reports of 50 injuries, but both Ford and NHTSA regulators say the vehicles do not pose an unreasonable safety risk. The cars have never been recalled for transmission repair.

Court document

Ford says the litigation is the work of greedy lawyers eager to line their pockets through frivolous claims. The company alleges that the Free Press investigation is driven by those lawyers when it in fact arises from Ford whistleblowers and hundreds of consumers from across the country.

"Selecting and attempting to draw conclusions from a few documents out of millions turned over to trial lawyers distorts the facts," spokesman Said Deep said in a statement to the Free Press on Monday. "Government agencies in the U.S. and globally have repeatedly looked at DPS6 data and have not found a safety issue."

From July through November, the Free Press interviewed engineers in product development and others who took part in bringing the cars to market. These experts outlined serious transmission issues identified prior to the manufacture and sale of the vehicles.

‘What are you thinking?’

The transmissions were introduced in the 2011 model year Fiesta, which went to dealerships in the spring of 2010, and 2012 Focus, which went on the market a year later. They were used until the Focus was discontinued with the 2018 model year and through the 2019 Fiesta model year.

Among things the Department of Justice Fraud Division investigation seeks to learn, according to a grand jury subpoena obtained by the Free Press in November, is whether Ford knew that the DPS6 transmissions were defective “and could not be repaired or made to comply with Ford’s warranty obligations and/or with the owner’s reasonable expectations.”

The status of the grand jury investigation is unknown; the agency declined to comment. Asked about the probe, Ford said that it routinely cooperates with authorities.

The seven Ford insiders interviewed for this article include engineers present for planning meetings as far back as 2006 and some people still employed by the company. One engineer still has his paper calendar entries listing who attended crisis meetings in 2010.

They shared detailed experiences on the condition that they not be named because they fear being identified could threaten their current jobs and their ability to work in the auto industry in the future. Information the insiders provided in separate interviews was consistent with each others’ accounts and with internal Ford documents and emails the Free Press obtained during its investigation.

Some of the engineers and product designers say they agreed to talk because spouses and religious advisers suggested it might help ease feelings of guilt and their worry about the safety of drivers today.

"I told one friend if he loved his stepdaughter, he'd get her out of that Fiesta as quick as possible," one of the company's mechanical experts said on Nov. 25. "I wouldn't put my kid in one of those cars."

About 1.5 million of the cars remain registered in the United States.

An engineer said, “We saw problems with this transmission design years before production.”

During development, thermal testing showed the transmissions' limits, and Ford began working on software in an attempt to mitigate the problems.

At the root of the problem was Ford’s decision to use dry clutch technology for the transmission. The guts of a dual-clutch transmission are more like a manual than a conventional automatic transmission, but the driver does not have to shift gears. These transmissions can improve fuel economy and weigh less than a conventional automatic — and also are less expensive to build.

There are two kinds of dual-clutch transmissions: wet-clutch and dry-clutch. The difference is whether oil lubricates the clutches. The DPS6 was a dry-clutch design.

“What in the world are you thinking going with a dry clutch?” one engineer asked. “The friction coefficient is inconsistent and it creates problems. But this was someone’s baby. If a manager came up with an idea, people would be afraid to say no. At first, it was just on paper. Someone should have said something. They should have. The idea should’ve been killed. No one knew how it was even considered — and then implemented — in the Focus and Fiesta.

“But they got to this point in the product development cycle where Ford realized they passed the point of no return. They spent a ton of money and here’s this giant problem,” the engineer said. “How do you solve it? They had implemented the flawed transmission and any fix was going to be super expensive."

Ford lawyers did raise at least one worry early on: the potential for the transmission to slip into neutral without warning. Ford’s Office of General Counsel in 2008 challenged engineers on the risk, arguing that the condition could lead to costly recalls if the technology was used for the first time in mass production vehicles.

We meant for that to happen

Addressing lawyers’ concerns, Ford quality supervisor Johann Kirchhoffer wrote in an email on June 27, 2008, that stalling “alone is not hazardous.”

“We have evidence that VW had a recall of a number of (similar) transmissions with a potential ‘Unintended Neutral’ occurring with low volumes,” he wrote. “We are pursuing any effort to reduce the occurrence of an ‘Unintended Neutral’ event to a so-called ‘Broadly Acceptable level.’”

The solution, engineers told the Free Press, was to make neutral an intended fail safe to keep a transmission from burning up or locking up from overheating or an electrical communications glitch. The company has consistently maintained that the neutral state is not a safety hazard because the car doesn't lose steering, braking or turn signals.

The whistleblowing engineers told the Free Press the strategy was extraordinary and a poor approach.

"It was just a Band-Aid," an engineer said.

In other automatic transmissions, Ford had used a "limp home" strategy, so if something wasn't working right, the car would have some “tractive” force. Engineers would install technology to limit engine speed and torque but a driver could still get some power from pushing the accelerator.

The engineers said defaulting to neutral is unsafe. Several Free Press interviews with drivers and complaints to the National Highway Traffic Safety Administration describe terror from the experience of losing acceleration on the highway or, for example, when merging onto a freeway.

The neutral state was explored in depth during development and clearly was seen as a potential defect, a key engineer said.

It became a focus of attention again in 2014, the same year NHTSA questioned Ford about the transmissions.

Roger Pline, DPS6 transmission system supervisor in Livonia, emailed Kirchhoffer on April 2, 2014: “Please send me the portion of the System FMEA that deals with MAM issues and the need to open the clutches. Need tonight or tomorrow.”

Glossary:

“Open the clutches” refers to, in effect, putting the transmission in neutral.

“FMEA” is failure mode and effects analysis, a system used by automakers and suppliers meant to ensure that potential problems have been addressed during product development. It includes a risk assessment system that ranks the severity of potential problems from 1 (“very minor effect”) to 10 (“Failure is hazardous and occurs without warning … involves noncompliance with government regulations.”). In DPS6 discussions, engineers abbreviate severity as SEV.

“MAM” is the mechatronic actuation module, which controls the DPS6’s two clutches and shifts the gears.

The situation had Ford lawyers’ attention. Kirchhoffer’s responses to the April 2 email, which included technical documentation, didn’t satisfy Pline, who emailed with HIGH importance on April 29: “I’ve been through these documents, but have not found what I’m looking for. Can you point me to the location in the FMEA that if the MAM loses power or communication that we open both clutches? I need to show our legal team that this is the proper intended function for this hardware.”

Kirchhoffer referred Pline to “final” FMEA severity classifications. The Free Press has corrected typos in an excerpt of Kirchhoffer’s reply: “Please note also that the mechanical FMEAs drive the end electrical failure modes as an effect and carry the highest electrical SEV classification. This drives the MAM up to the highest criticality! On the wiring harness we have kept ‘unintended neutral/roll back’ as SEV 10, which we did NOT on the clutch and MAM due to political reasons. However, we have treated neutral states as SEV 10 item in the background.

“... Please raise the flag if you need more help. I agree — this is a rather complex area!”

Obtained by the Free Press

We asked the Ford insiders what Kirchhoffer likely meant by “political reasons.”

“He was being threatened by somebody,” a former senior engineer surmised.

“Somebody might have told him that if you declare the thing a '10,' which would lead to a safety recall,” he would lose the project. If it’s an 8, well, they’ve pulled that on us before. They could keep not being truthful to each other and pretend it would work and then they’d still have jobs. It’s ‘politics’ all through everything on these ratings.”

Later in 2014, amid discussions with NHTSA that focused on the neutral state that Ford blamed on a solder crack, the company extended the drivetrain warranty to seven years/100,000 miles on Focus and Fiestas built before mid-2013 and added a dashboard warning light to tell drivers the transmission is at risk of malfunction. The latter move was described in company documents as something that “will more easily satisfy NHTSA’s requirements.” The agency chose not to open a formal investigation.

Ford also has extended the warranty on the transmission control unit to 10 years/150,000 miles.

This summer, a month after publication of Out of Gear and amid renewed NHTSA scrutiny, Ford extended the drivetrain warranty on cars built between mid-2013 and 2016. Ford remains overwhelmed with repair needs. This fall, Ford dealers have networked in an attempt to find mechanics to work full time on DPS6 repairs.

Among the issues the Department of Justice is examining is whether Ford misrepresented the nature of DPS6 defects to federal regulators.

A shaky launch

Insiders who drove early production vehicles said serious problems were obvious right away.

Having worked on the projects for years, one engineer said, “I took a production vehicle home overnight for an evaluation drive. It started warming up and it accelerated away from our parking lot. Fine. Then it stopped at a red light, then I went to accelerate fairly moderately and it felt like I got rear-ended by someone. The car just shot forward and there was a big boom, but no one had hit me. It was the transmission.”

The company was scrambling, he said. “They needed to get the vehicle on the road while they were still developing software.”

Another engineer explained the effort: “They had problems with the launch and shift quality. They even had an elaborate program where initial Fiestas had to go on a drive route by Greenfield Village for adaptive learning for the (transmission) control module. It was a panic situation. They were trying to develop software to handle the glitches. Obviously, they were never able to. They were trying to rush software out to deal with the problem of vehicle performance and shifting.”

A veteran engineer described the coding efforts: “They masked things using computer software language. One guy was able to modulate a clutch in a way that torque released so it masked the problem. Management latched onto it. Not only can we mask problems, but we can fake success. They started to write software to mask problems. But there's no way you can software your way out of a physics problem.”

Said a seasoned mechanical expert on whom Ford depended for project direction, “I was driving a Fiesta during the launch, and it wasn’t right."

“It couldn’t figure out what gear it wanted to be in, then it kept hesitating. That sucker would not go into any gear. The transmission revved all the way up and finally found the gear. I had to pull over and swerve so I wouldn’t get hit. It wouldn’t shift. I think it actually dropped into neutral,” he said.

“Everybody knew they had problems,” the mechanical expert said. “They were rushing into production and things weren’t ready yet.”

While customers reported transmission problems with the 2011 Fiesta — 313 complaints were filed with federal regulators, a high number — troubles mushroomed with release of the 2012 Focus. The Focus was more than 300 pounds heavier than the Fiesta and demanded more of the transmission. Buyers of the 2012 Focus filed an extraordinary 1,130 transmission complaints with NHTSA and started flooding dealership repair departments. Consumer Reports in October 2011 lowered Ford’s reliability rating, in part because of the transmission.

That month, secret Ford documents show, the company made a preliminary decision to abandon the transmission, but also noted that the decision would delay launch of future model years, add production and factory costs and reduce fuel economy. The idea was scratched.

Court documents

A Ford production worker at the Michigan Assembly Plant in Wayne for launch of the 2012 Focus in early 2011 said problems were evident.

“As soon as you’d drive those cars off the line, you’d feel the shuddering,” he said. “Some were way worse than others. We were always told that’s normal. The slipping is normal. I can’t tell you how many times I said something to an engineer on the line. We’d been trying to get it fixed since day one. People like team leaders, regular people on the line, quality inspectors, drivers who would drive the cars, repair people, everyone at the plant knew the transmission was garbage.”

The production worker is one of many family members who have worked in white- and blue-collar jobs at Ford, people who love the company and are saddened by what's happened. He recalled the tension of the time, with Detroit automakers on life support.

“You didn’t ask questions,” the worker said. “It was right after the recession, right after Ford, GM and Chrysler all basically redid their whole infrastructure of the company and got rid of thousands of people.”

While Ford avoided bankruptcy, CEO Alan Mulally had promised bankers that the company would make more fuel-efficient cars, in demand at the time from financially bruised consumers — particularly working-class families toward whom the Focus and Fiesta were aimed. At the same time, the Obama administration was pushing tougher fuel economy standards and automakers faced fines if they didn’t meet them. The DPS6 was a key for Ford.

“That Focus got great gas mileage,” the Michigan Assembly worker said. “They freaking rushed that thing out as fast as possible. They knew about the problems and turned their eye away from it. They didn’t want to deal with it. They would have to worry about engineering, designing and redoing the transmission. The amount of money they would’ve had to cough up would’ve been a huge amount.

“Everybody started to figure it out,” the production worker said. “But Ford ... wanted to keep going. It was a big fiasco.”

Internal emails back him up: Just six months before the 2012 Focus hit the market, product development engineer Tom Langeland emailed colleagues and supervisors describing “nasty launch judder” — intense vibration from a stop — that “did not clear up after many miles of driving.”

“We also cannot achieve a driveable calibration that will get us to production,” he wrote. “The clutch torque delivery MUST BE IMPROVED.”

Court documents

Accidents and fatalities?

Among the Justice Department’s lines of inquiry, according to the subpoena obtained by the Free Press, is “whether Ford concealed from owners and/or regulators that the transmission defect(s) and resulting ‘failure modes” (e.g., ‘unintended neutral’/’loss of motive power’) resulted in a dangerous condition(s) that could and/or did cause accidents, injuries and/or fatalities.”

A former Ford hotline worker, who managed internal calls from dealers nationally to the company, questioned how anyone might know if the Fiesta and Focus resulted in injuries or death because reporting is designed to minimize the severity of incidents.

He showed a Free Press reporter the protocol for internal reporting to illustrate his point.

“They will tell you, ‘Don’t code a certain way.' If you do, using words like wreck or crash or fire, NHTSA gets involved. You don’t say certain things. For example, you never say 'the dealership says,' you always say ‘the customer states.’ You don’t say certain things that make the company liable. So you’d say ‘thermal event’ instead of fire. If you don’t say it the right way on the Ford tech hotline, you won’t have that job for long.”

Ford said, "We encourage our employees to be accurate and concise in all their communications."

A mechanical expert who worked inside Ford to troubleshoot the Fiesta and Focus cars said in November, "Really, I’m surprised no accidents have been attributed to transmission failure where people got hurt. We had a lot of quality issues that year.”

Ford insists the cars were and are safe.

A Free Press analysis of consumer complaints to NHTSA found reports of 50 injuries, including incidents when drivers reported cars bolting forward or delayed acceleration as they intended to turn left, leaving them in the path of oncoming vehicles. A key engineer involved in development said those incidents could be consistent with how the transmission behaves.

One driver reported being T-boned and his elderly wife suffering chest bruising; another said he had a $16,000 medical bill after slamming into a wall in a parking lot; a third said she spent the night in a hospital after a delayed start in a left turn.

A NHTSA spokesman told the Free Press that the agency, charged with protecting the public on roadways, "has been monitoring the consumer complaints on the Ford DPS6 transmissions for many years. The vast majority of the complaints involved a low or nonexistent level of severity rather than a safety issue warranting further investigation at this time."

The agency's Office of Defects Investigation "attempted to verify the injury complaints (by reviewing available police reports and insurance claims, as well as interviewing those involved) and found many to be difficult to validate and/or not attributable to the alleged defect."

Jason Levine, executive director of the nonprofit Center for Auto Safety in Washington, D.C., said the federal regulatory agency has traditionally been, and remains, an underfunded and understaffed safety agency. "Even in the best of times, this limits their ability to identify hard to find defects. And these aren’t the best of times."

NHTSA has been criticized for its failure to quickly identify defects that led to fatalities from defective General Motors ignition switches, exploding Takata air bag canisters and unintended acceleration in Toyotas.

Levine added: "Manufacturers have a long history of bending over backward to avoid reporting potential problems as opposed to addressing the issue head on and standing behind their product. The reason that car companies prefer secret settlements is to hide the existence of a potential pattern of defects from the public. While it is difficult to know, whenever there is a secret settlement it is very likely that are other similar settlements because that is the usual course of business when defects result in serious injuries or fatalities."

Death reports

Ford reported to federal safety officials at least two traffic deaths that families blamed at least in part on defective DPS6 transmissions, though the carmaker is adamant that neither actually was related.

The grieving survivors' assertions, one in a lawsuit that Ford settled, the other from parents so upset that they traded their second Fiesta for a truck and "monstrous payments," do not prove that the transmissions had a role in the fatal accidents. The law that required Ford to report them is meant to provide early warning of possible defects and explicitly seeks all such assertions without expecting proof.

Obtained by the Free Press

NHTSA declined to provide a statement about the deaths after three months of discussion with the Free Press.

Daniel Jackson

On May 20, 2014, Daniel Jackson of Buena Vista, Tennessee, drove his 2012 Ford Focus west on U.S. Highway 70 with his wife of 38 days in the passenger seat.

“Suddenly and without warning, the Ford Focus darted left across the center line into oncoming traffic. It was struck head on by a wrecker,” according to a lawsuit filed by widow Victoria Jackson, who was severely injured. The lawsuit blames a steering defect and cites transmission problems.

Their vehicle was “equipped with a data recorder which shows that at or near the time of impact, the vehicle’s transmission shifted from ‘drive’ to first gear,” a filing in the case said, noting “belief the defective transmission was a cause or contributing factor in the accident.”

Daniel Jackson “reasonably expected his new vehicle to be free of defects and that it would not pose an unreasonable and unavoidable safety risk. That after purchasing the vehicle, Mr. Jackson experienced some difficulties with the vehicle’s transmission and took it to Golden Circle on multiple occasions for service and repairs …”

Ford in early 2018 settled Victoria Jackson’s claim. The assertion against the Golden Circle dealership, focused on transmission service, was dismissed before the settlement without being litigated. The lawyer for Jackson declined to comment, citing a confidentiality agreement.

Ford said, “Our understanding of the facts indicates that the transmission played no role in the accident. We reported the allegation as required under the TREAD Act regulations.”

TREAD is the Transportation Recall Enhancement Accountability and Documentation Act, passed by Congress in 2000 after the Ford-Firestone tire debacle, which led to 174 deaths. The law is designed to alert federal regulators and automakers to potential defects in hopes of getting them fixed and preventing injury and death.

Automakers are required, under threat of criminal penalty, “to report any claim or notice of an incident related to death or injury due to an alleged defect,” NHTSA told the Free Press. “While these claims are unverified allegations, and in and of themselves are not evidence of a defect, they may help NHTSA identify a possible defect.”

Donald Ray Wright

On the clear, dry evening of Saturday, May 25, 2013, Donald Ray Wright was driving one of the two 2011 Fiestas his West Virginia family bought the year before. Traveling on a familiar county road going to a movie with friends, Wright, 20, died instantly when the Fiesta went off the road, hit a tree and flipped.

Kimberly Skaggs

Passenger Chris Collins told the Free Press it felt like the car was on ice and then grabbed before it went off the road. Police noted skid marks on the road and said no action by the driver contributed to the crash. It said Wright, who according to the police report was wearing his shoulder and lap belt properly, had a clean driving record and no alcohol or other drugs in his system.

Phyllis Wright can’t prove it, but she told the Free Press she believes that the PowerShift transmission in her son’s green Fiesta was responsible for his death. She said the family had complained to the dealer repeatedly about the transmissions in both cars before the accident.

She and her husband took the remaining Fiesta to Mid-State Ford in Summersville for transmission repair a few weeks after losing their son. When they arrived, the dealership had no record of her appointment.

“I started falling apart, and my husband threw down the keys on the counter and told ‘em to keep it, keep the car,” Wright recalled. “By this time, I was hysterical and bawling. I said, ‘Apparently no one can effing help me. One car already killed one kid and now it’s going to kill the rest of my family.' ”

The dealer arranged for the Wrights to trade the Fiesta for a Ford truck. “We had to make monstrous payments. I didn’t care. I needed to get that car out of our life,” she said.

Word of the fatal accident reached Ford headquarters in Dearborn. The Free Press obtained an internal company document dated Dec. 2, 2013, that lists several incidents involving cars using the DPS6. It includes a cryptic reference to the crash.

“Transmission stalled and caused an accident,” the document says, indicating that the report was handled by Ford’s Office of General Counsel. “Her son was going around a corner at 60 mph when it happened. The son died on impact. We requested additional information, but received no response.”

This fall, Ford said, “The accident was tragic, as a young driver lost his life. But any attempt to characterize this accident as being caused by the car ignores the facts of the accident. … Based on the police report, the accident facts, the absence of pre-accident warranty claims, Ford does not see a basis for attributing the accident to the vehicle.”

Phyllis Wright did not take action against Ford.

“Everybody kept saying, ‘Sue Ford. Sue Ford,’” she said from her home in Glen Ferris, West Virginia. “But I didn’t want no dead baby money.”