Courtesy of Benzinga
An Ohio state court awarded $2 billion in damages to commercial truck dealers from Ford Motor (NYSE: F), upholding a February ruling in a new class-action suit. Dealers said that a Ford program had offered “hidden” discounts, effectively overcharging some dealers between 1987 to 1998.
Ford, the second largest automaker in the U.S., said it would appeal the decision, which was certified as a class action on behalf of more than 3,100 dealers nationwide. A Ford spokesperson said the company believes it caused no harm to dealers, but brought significant benefit to the dealers.
The program in question offered dealers discounts on medium to heavy-duty trucks, depending on their profitability. In other words, Ford set wholesale prices on the trucks higher than buyers were willing to pay for them, then awarded some dealerships discounts so they could make a profit. The program violated the law by effectively offering merchandise at unpublished prices.
In February, a jury awarded $4.5 million to a dealership in Youngstown, Ohio. Judge Peter Corrigan of the Cuyahoga Country Common Pleas Court in Cleveland used the same formula to award $800 million in damages and $1.2 billion in interest in the class action suit.
Ford, which sold its medium- and heavy-truck business in 1998, reported a $6.6 billion profit in 2010.
