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FOR IMMEDIATE RELEASE MONDAY, JUNE 8, 1998

ENR

EPA (202) 260-4355

FORD MOTOR TO SPEND $7.8 MILLION IN CLEAN AIR ACT SETTLEMENT

AND RECALL 1997 ECONOLINE VANS

WASHINGTON, D.C. -- Ford Motor Company will spend $7.8 million to settle allegations that it violated the Clean Air Act by illegally installing a device which defeats the emissions control system in 1997 Ford Econoline vans, the Department of Justice and the Environmental Protection Agency announced today. Today's announcement affects 60,000 vans.

"This settlement means cleaner air for the American people," said Attorney General Janet Reno. "It will help prevent thousands of tons of nitrogen oxide from being released into the atmosphere. It also sends a message to the automobile industry: You cannot tamper with our environment."

EPA Administrator Carol M. Browner said, "This action is another step taken by this Administration to ensure that companies fulfill their responsibility to protect public health and environment. High levels of smog can cause breathing problems for millions of Americans and aggravate asthma attacks in our children. We are working to reduce harmful levels of smog through more protective public health standards and through enforcement actions like the one we are taking today."

The federal government said the claims against the automaker involve the illegal use of a defeat device, in this case a sophisticated electronic control strategy ("strategy") designed to enhance fuel economy. According to EPA, the system caused smog-causing nitrogen oxide emissions to increase well beyond the limits of the Clean Air Act emission standards when the vans are driven at highway speeds.

EPA estimates the settlement will prevent thousands of tons of nitrogen oxide from being released into the atmosphere. The smog caused by nitrogen oxide can aggravate asthma and cause other respiratory problems in humans.

The consent decree filed today in Federal District Court in

Washington, D.C. requires Ford to recall all of the affected Econolines in order to deactivate the strategy at an estimated cost of $1.3 million, pay $2.5 million in civil penalties, purchase 2,500 tons of nitrogen oxide credits valued roughly at $2.5 million to offset the excess emissions, and spend $1.5 million on projects designed to reduce future harmful pollutants in the air. If Ford does not succeed in recalibrating at least 70 percent of the vans to deactivate the illegal strategy, additional offsets will be required.

EPA discovered the existence of the illegal strategy when the vans were being driven at speeds greater than 40 mph. Ford voluntarily stopped the sale of the Econolines and began deactivating the strategy in March of last year when notified by EPA that the affected vans may be in violation of the Clean Air Act. The company also voluntarily implemented a special service instruction to dealers to deactivate the strategy in the vans and cooperated with EPA and DOJ during the investigation. About 25 percent of the 60,000 Econoline vans equipped with the strategy have been captured through Ford's special service instruction to date. The remainder of the vans will be recalled.

Owners of the affected vehicles will receive a recall notification letter from Ford. The company will perform all recall work free of charge at the convenience of the vehicle's owner.

A notice of the proposed settlement will be published in the Federal Register, beginning a 30-day public comment period and must be approved by the court.

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