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Chinese regulators slap Ford's joint venture with $23.6 million fine

CNN Business  /  June 5, 2019

Hong Kong - Chinese regulators have fined Ford's main joint venture in the country for violating antitrust laws.

China's State Administration for Market Regulation slapped Changan Ford with a 162.8 million yuan ($23.6 million) fine for setting minimum resale prices on its cars in the city of Chongqing.

The fine amounts to 4% of the company's sales in Chongqing last year.

Ford owns 50% of the joint venture, with the rest controlled by its local partner, state-owned carmaker Changan Automobile.

Changan Ford's actions deprived downstream dealers of pricing autonomy, restricted competition and damaged the legitimate interests of consumers, the regulator said.

Ford said it "respects" the market regulator's decision.

"Changan Ford has taken corrective action in its regional sales management together with its dealers," a Ford spokesperson said.

"As an ethical company, Ford is committed to complying with local laws and regulations wherever we do business," the spokesperson added.

The penalty also comes as Ford is looking to make up lost ground in China. Ford's sales in the country plunged by nearly 40% in 2018 compared to the previous year.

The carmaker announced in April that it plans to launch more than 30 new Ford and Lincoln vehicles in China over the next three years as it tries to reverse a decline in sales in the world's biggest auto market.

China is Ford's second biggest market after the United States.

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In China, car dealers have the right to sell vehicles for whatever price they want......as they should in a free market.

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Ford says Fusion output will continue at least through 2021

Michael Martinez, Automotive News  /  June 5, 2019

DETROIT -- Ford Motor Co. will discontinue the Fusion Sport trim for the 2020 model year as it focuses on offering more popular versions in the sedan’s final years. But other versions of the sedan will remain in production until at least 2021, Ford said Thursday.

"Our goal in the final production year is to further simplify the offering and focus on maximizing the more popular SE, SEL, and Titanium models," a Ford spokesman said.

Ford will build the Fusion at least into the 2021 calendar year, a spokesman said. The spokesman previously said that production would end in the 2020 calendar year, but on Thursday said that information was incorrect. 

The news of the Sport trim’s death marks the end of what could be considered a failed last-ditch effort to save the vehicle.

Amid declining sales, Ford made the Fusion Sport the centerpiece of its 2016 Detroit auto show display. It used media personality Ryan Seacrest to reveal the new trim -- part of the Fusion's midcycle freshening -- in a callback to its 2012 elaborate celebration in New York's Times Square for the second-generation Fusion.

Ford management hoped the Fusion Sport's flashy performance figures — 325 hp and 380 pound-feet of torque from a 2.7-liter V-6 engine — would help pump up sales and differentiate it in what some considered a bland segment.

It failed to generate much buzz. Spokesman Jiyan Cadiz on Wednesday said the Sport trim accounted for less than 10 percent of total Fusion sales.

Overall Fusion sales in the U.S. topped 300,000 in both 2014 and 2015, although the sedan could not topple Toyota, Honda and Nissan in the competitive midsize sedan segment. U.S. sales of the Fusion dropped 17 percent to 173,600 last year but rose 8.8 percent to 77,578 in the first five months of 2019.

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Ford ready to sell Russian plants

Reuters  /  June 7, 2019

ST PETERSBURG -- Ford said it is ready to sell its idle Russian plants and has had interest from potential buyers.

"We are open to discuss potential sales to other companies," Ford of Europe Chairman Steven Armstrong on the sidelines of the International Economic Forum. "We have had interest from a number of different companies."

Ford said in March that its Russian joint venture Ford Sollers would close two assembly plants and an engine factory in Russia, exiting the country's passenger vehicle market.

Ford's passenger-vehicle production in Russia will cease by the end of June following the closure of its car plants in Naberezhnye Chelny and Vsevolozhsk near St. Petersburg and an engine plant in Elabug.

The Vsevolozhsk factory builds the Focus and Mondeo models and Naberezhnye Chelny makes the Fiesta small car and Ecosport crossover.

Ford's vehicle plant in Elabug, which produces Transit light commercial vehicles, will remain open.

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Full-size Ford Bronco test mule spotted.

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Photo 4.jpg

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Ford's director of global strategic design resigns

Michael Martinez, Automotive News  /  June 9, 2019

DETROIT -- David Woodhouse, Ford Motor Co.'s director of global strategic design who was instrumental in crafting the Lincoln luxury brand's latest styling, has resigned from the company.

It's unclear why he left.

In a Facebook post on Friday, Woodhouse, 50, said it was a "difficult decision," especially considering his personal investment in Lincoln.

"Ending a long-standing relationship with a corporation is just like ending a personal relationship multiplied by the number of wonderful friends and colleagues," he wrote. A Lincoln spokeswoman said Woodhouse "elected to leave the company" but gave no other details.

Woodhouse worked at Ford in a number of roles since joining the Premier Automotive Group, the company's onetime stable of luxury brands that included Lincoln, Volvo, Jaguar and Land Rover, in 1999, according to his LinkedIn profile.

He added the title of director of global strategic design, in addition to duties as director of Lincoln design, in July 2017, shortly after Jim Hackett took over as Ford CEO. As part of the overhaul of Ford's design team at the time, Joel Piaskowski, Ford of Europe's design director, was named global director of Ford design, overseeing cars and crossovers.

Woodhouse, Lincoln's design director since 2013, helped turn around the once-moribund brand with new styling centered around a philosophy the company labels "quiet flight."

Woodhouse previously was chief designer in Ford's strategic design studios in London and California and was part of the team behind the Lincoln C Concept presented at the 2009 North American International Auto Show in Detroit.

The Ford Shelby GR1, Ford Airstream, Ford Reflex, Lincoln Continental Concept, Lincoln Mk9 Coupe and Lincoln Aviator Concept are among the key vehicles Woodhouse had a hand in styling.

According to his LinkedIn profile, he was an assistant chief designer with Cadillac in Europe for less than a year starting in late 1998, where he helped craft the Cadillac Imaj concept.

Woodhouse began his automotive career with BMW.

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Ford recalls 1.2 million Explorers for suspension issue

Danielle Szatkowski, Automotive News  /  June 12, 2019

Ford Motor Co. on Wednesday said it is recalling 1.2 million Explorers in North America to fix a problem with the rear suspension that dates to the vehicle's redesign from a traditional SUV into a unibody crossover in 2010.

Ford also issued a recall for 123,000 previous-generation F-150s because transmission calibration software used during a February recall failed to resolve the problem.

Ford, in a regulatory filing, said it expects the Explorer recall to cost about $180 million. It did not give estimated costs for the F-150 recall or two other recalls covering a total of 16,300 vehicles announced Wednesday. One of the smaller recalls is to fix substandard welding in Econoline vans that are often used for school buses and ambulances.

The 2011-17 Explorers being recalled were built at the Chicago Assembly Plant from May 2010 through January 2017. Ford said the vehicles could experience a fracture in the rear suspension toe link that could reduce steering control and increase the risk of a crash.

Ford said one customer reported hitting a curb due to a broken toe link, but it's not aware of any injuries related to the defect.

In addition to the 1.2 million Explorers in the U.S., the recall covers about 28,000 in Canada and Mexico. Ford built about 1.6 million Explorers during the covered time frame.

A separate recall issued Wednesday covers a similar problem with rear suspension toe links on 12,000 vehicles in Canada. Vehicles affected by that recall are the 2009-15 Lincoln MKS, 2009-17 Ford Flex and 2010-17 Ford Taurus and Lincoln MKT. Ford said it's aware of one report of a crash with minor injuries.

The repair for both suspension toe link recalls involves replacing the left and right toe links with a forged toe link and aligning the rear suspension.

The F-150 recall is for certain 2013 models with 5.0-liter and 6.2-liter gasoline engines that had the powertrain control module software reprogrammed in a previous recall fix. Ford said vehicles without the complete recall fix calibration remain at risk for unintended transmission downshift due to intermittent output speed sensor failure. The transmission could downshift to first gear without warning, potentially causing the driver to lose control and crash.

Any F-150s that didn't have the previous recall fix are not affected and will receive updated software under the February recall program.

Ford said it's not aware of any accidents or injuries related to the issue. The recall covers 107,850 F-150s in the U.S. and 15,200 in Canada.

The Econoline recall covers 4,300 vans with 5.4-liter engines from the 2009 through 2016 model years. Ford said a capacitive discharge weld within a coast clutch component in the transmission could fail and possibly immobilize the vehicle. Dealers are being instructed to replace the coast clutch cylinder and the single-engaging coast one-way clutch with a dual-engaging one-way clutch.

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Ford suits show ‘fine line' in patent cases

Michael Martinez, Automotive News  /  June 17, 2019

In 1993, on an otherwise drama-free June day in America's heartland, Ford Motor Co.'s future product development and purchasing boss, Hau Thai-Tang, faced a crisis.

He was embedded with the Newman/Haas racing team throughout the IndyCar season and was preparing for a race at Milwaukee Mile in Wisconsin. It was the team's de facto home track, and Newman/Haas expected an easy victory.

But during practice, another driver consistently outperformed the team's stars. Initially flummoxed, Thai-Tang's group eventually discovered the rival car had been outfitted with a part near the front wheels that made it faster by pushing away turbulent air.

Under immense pressure, Thai-Tang and his team quickly mocked up designs for a similar device, faxed them to the team factory outside Chicago, and had the part built, overnighted and bolted onto the car in time for qualifying the next day. Although the rival team secured the pole position, Newman/Haas won the race.

"These guys are obsessed about understanding the competition," Thai-Tang recalled to Ford employees during a 2018 presentation. "They copy with pride; there's no hubris there. If they think somebody else has a better idea, it doesn't last for very long."

That idea — "copy with pride" — may be common in a competitive marketplace. If a rival beats you to market with a useful technology or feature, the thinking goes, it's often easier to swallow your pride and adapt something similar rather than spend millions of dollars to essentially reinvent the wheel.

Greg Reilly, an assistant professor at the Illinois Institute of Technology's Chicago-Kent College of Law, said the U.S. patent system encourages engineers and others to "design around" inventions to improve upon them.

Fraught with risk

But that comes with tremendous legal risk. It's not hard for an effort to "design around" or "copy with pride" to devolve into illegally stealing trade secrets or intellectual property.

"It's an incredibly fine line," Reilly says. "You can be infringing on a patent without even knowing."

Some high-profile lawsuits against Ford illustrate the difficulties automakers face when navigating those thorny issues, especially as vehicles increasingly rely on complex software and technology.

Versata Software Inc., a Texas software developer, sued Ford in 2015, claiming the automaker illegally developed a copycat program of what it used to pay Versata to supply. While such lawsuits are not uncommon, the case continues to dog Ford four years later. Versata has spent tens of millions of dollars pursuing the case, hiring high-profile lawyer Lanny Davis — who was a special counsel to former President Bill Clinton and who represented President Donald Trump's former attorney, Michael Cohen — and Bo Dietl, a New York private detective and former Arby's pitchman. The case is expected to go to trial in November.

This year, three Massachusetts Institute of Technology professors sued the automaker claiming Ford stole their patented dual port- and direct-injection technology to use on the country's top-selling vehicle line, the F series.

Hollywood turned one dispute with Ford into a 2008 film, Flash of Genius, that chronicles the company's protracted legal battle with inventor Robert Kearns during the 1970s and 1980s.

Kearns ultimately won his case against Ford, which was found to have infringed upon his patent for an intermittent windshield- wiper mechanism.

"As a general matter, for a company that is developing new technology to know what's out there and know whether they're violating patent rights is a difficult question," Reilly said. "There's some real tough situations."

Ford declined to comment for this story.

Versata case

Versata and its attorneys argue that the company's case is cut and dried.

It centers around proprietary software, known as Automotive Configuration Manager, that Ford had licensed from Versata to help identify incompatible parts in millions of possible vehicle configurations. Versata accuses Ford of having workers with firsthand knowledge about the Versata product copy it so the automaker could stop paying for it. Versata says Ford even used identical terms and phrases from Versata's manual for the Automotive Configuration Manager software.

Ford, soon after the lawsuit was filed, claimed it began developing replacement software in 2010 and that the technology is different from Versata's. "Ford's invention approaches vehicle configuration very differently, and more efficiently, than" Versata's technology, Ford said in a filing.

Versata is seeking at least $180 million in past damages, and it wants Ford to remove the software, which could potentially affect its manufacturing operations.

Versata, from the outset, has taken its complaints public. Its lawyers held a 2015 press conference with an elaborate display of a cutout of Henry Ford standing by a faux brick wall with a large hole in it, representing the internal divide that Versata says Ford breached by having people with knowledge of Versata's software develop the in-house replacement.

Dietl became involved when Versata hired his investigative firm to find evidence of theft. Ford has accused Dietl's firm of harassing witnesses, a charge he denies. Dietl subsequently took out full-page ads calling on executive Elena Ford, who Dietl says is on a committee that oversees the automaker's software and technology use, to apologize.

"We're going to use whatever resources we need to for justice," said a senior Versata executive who asked not to be named because of the ongoing litigation.

MIT professors

Most intellectual-property disputes, Reilly said, can be difficult to litigate because they involve a lot of he said, she said.

Many cases stem from efforts by an inventor or startup to persuade a large company to adopt a technology. The company may decline the technology but soon brings something similar to market.

That's the situation described in a January lawsuit against Ford by three MIT professors. They claim the automaker stole technologies used in its popular EcoBoost engines.

The suit, filed in federal court in Delaware, says the professors transferred ownership of their creations to MIT, which then granted exclusive patent-licensing rights to a small company the three founded, Ethanol Boosting Systems. EBS offered to license patents for the enhancements to Ford in 2014, but the automaker declined.

The suit alleges that Ford's counsel for global engine intellectual property "indicated that Ford had no plans that he knew of to use that technology in its vehicles." But, the professors argue, Ford has since applied their technology to a number of vehicles, including the F-150 and Mustang.

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There's no "fine line" about it.........copying is copying.

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Guess Ford didn't learn anything from the Kearns case.  Funny thing about the Ecoboost engines is that I remember hearing all the engineering on those was contracted out to a Bosch subsidiary in India.  Wonder where the idea really came from?

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