LOS ANGELES (AP) — Ford Motor Co. shares sank Monday after an Ohio judge said the automaker had to pay nearly $2 billion in damages to thousands of dealerships who participated in a 2002 class-action lawsuit. Ford has said it would appeal.
THE SPARK: Cuyahoga County Common Pleas Judge Peter Corrigan in Cleveland issued the ruling based on a Feb. 11 jury determination that the company overcharged dealers for commercial trucks over 11 years.
The $2 billion award covers more than 3,000 dealerships and about 474,000 trucks. It includes a judgment of about $781 million and about $1.2 billion in interest.
THE BACKGROUND: Ford's annual report, filed Feb. 28, says the class action included all dealers who purchased a 600-series or higher truck from Ford from 1987 to 1997. It says the lawsuit accused the automaker of failing to reveal that price concessions were given to some dealers.
Ford said in a Friday statement that it will appeal.
"We believe that the trial court committed significant legal errors. Ford will appeal the judgment and we are confident that it will be reversed," the statement said.
STOCK ACTION: Shares fell 39 cents, or 2.9 percent, to $12.97 in midday trading Monday. The Dow Jones industrial average was down 14 points at 11,966 at midday.