Ford sold 2 million cars with a transmission its engineers knew was defective

The DPS6 'PowerShift' dry dual-clutch was Ford's answer to four-dollar gasoline: manual-like economy with automatic convenience, launched in the 2011 Fiesta and 2012 Focus. Engineering knew it wasn't ready. Six months before launch, a development engineer emailed colleagues about 'nasty launch judder' that never cleared up; a month before dealers got the Focus, Ford's acting transmission engineering director wrote that the plan was to 'ship the vehicles... with the level of shudder we currently have.' Roughly 2 million were sold in the US.

Owners got cars that shuddered, jerked and lurched — and defaulted to neutral mid-drive when the transmission protected itself. Ford's remedy never changed: clutch replacements and software patches. In Australia, 37% of these cars needed at least one clutch swap, while Ford told customers the shuddering was their driving style. NHTSA logged 4,300+ complaints including 50 injuries, conferred with Ford in 2014 — and ordered no recall.

The bill arrived from all directions at once. Australia's Federal Court fined Ford AU$10 million for unconscionable conduct in refusing refunds and making customers prove intermittent faults on demand. In the US, about 13,000 individual lawsuits piled up alongside a $35 million class settlement, and the Justice Department opened a criminal fraud probe — via grand jury subpoena — into whether Ford knew the transmissions could not be repaired and said otherwise.

AU$10M penalty in Australia; $35M US class settlement with 13,000 more suits; a DOJ criminal fraud probe; millions in clutch replacements.

Launch timing beat engineering reality: internal emails show judder was documented six months before the Focus went on sale, and the decision was to ship anyway and fix it 'ASAP'.

The fix strategy assumed convergence — replace clutches, update software — but the dry-clutch design itself was the problem, so every repair was temporary by construction.

Customer-facing scripts blamed driving style, which converted a quality problem into a legal one: the Australian court's unconscionability finding rested on exactly this conduct.

Telling regulators the cars were fine, while internally doubting the transmission could ever be repaired, is the specific conduct the DOJ fraud probe was designed to test.

A defect you can't fix turns every warranty visit into evidence against you. If repeat repairs don't converge, replace the design or buy the product back — don't script the blame onto customers.

Ford discontinued the Focus after the 2018 model year and the Fiesta after 2019, so the transmission outlived neither car it powered. The Australian penalty came with a court-enforceable undertaking: a program letting at least 2,000 customers whose refund requests were refused take their cases to an independent arbiter. The $35 million US settlement was still under judicial review in late 2019, and the DOJ criminal probe remained open. Ford has never recalled the cars for the transmission itself.