Mercedes-Benz warranty costs increase Ford Oakville in jeopardy?

DaimlerChrysler’s Mercedes-Benz division has seen a tripling of warranty costs in the last two years, according to a Reuters report quoting the British daily the Financial Times. The Times reports that a source inside the company states that warranty costs last year matched development costs, at approximately US $1.55 billion. Mercedes vehicles most prone to warranty claims were the Europe-only A-class, and the M-class SUV.

Ford’s Oakville-Ontario based F-series truck plant may be in jeopardy, according to a recent Globe and Mail report.

The report quotes an “industry source” in Detroit who questions the long term viability of the plant after it was passed over for production of the next generation of F-Series trucks, due for production in 2003. “Every vehicle facility has to be sure that it has product in place for the next five, six years”, the unnamed source said, adding “I would question Ontario Truck’s position in light of that.”

CAW president Buzz Hargrove, however, has expressed confidence in the future of the plant, which employs 1,400. The facility began building the current generation F-Series for the 1997 model year, after an investment of approximately C $1-billion to the paint and body shops. Ford of Canada spokesman John Arnone told the Globe that there are no plans to close the plant.