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The Consumerist

Ford Recalls Nearly 445K Vehicles For Power Steering Failure, Fuel Leak Issues

Wed, 2015-05-27 16:40
(Freat Beyond)

(Freat Beyond)

Ford Motor Company issued two new recalls Wednesday covering nearly 445,000 vehicles after receiving numerous complaint and incident reports, including at least four accidents related to loss of power steering and high underbody temperatures.

Ford announced today that it will recall 422,814 model year 2011 to 2013 Fusion, Flex and Lincoln MKS and MKT, model year 2011 to 2012 Lincoln MKZ and 2011 Mercury Milan vehicles for a possible electrical issue that can lead to steering difficulties.

The manufacturer says the issue – an intermittent electrical connection in the steering gear – can result in loss of electric power steering assist while driving.

If the loss of power steering occurs, the system defaults to manual steering mode making it difficult to steer and increasing the risk of a crash.

Ford says it is aware of four minor accidents, but no injuries as a result of the issue.

In a complaint posted to the National Highway Traffic Safety Administration website, the owner of a 2011 Ford Fusion says the power steering assist in their car has failed at least five times.

“Once while I was driving, which caused me to crash into a curb and get a flat tire,” the owner recalls. “It seems to resist itself after I turn the car off and turn it back on.”

Another owner of a 2011 Ford Fusion tells NHTSA that the vehicle’s power steering failed while driving 60 miles-per-hour on the highway.

“When this happened I was at an off ramp exit and had almost zero steering,” the complaint states. “I panicked and tried to get off the exit which has a sharp radius turn. I could not keep the vehicle on the road and traveled off into grass until I could skid to a stop.”

Dealers will perform one of two service fixes, depending upon whether certain diagnostic trouble codes are present in the vehicle. They will either update software for the power steering control module or replace the steering gear.

The second recall covers 19,500 model year 2015 Ford Mustang vehicles with a 2.3 liter engine that may experience elevated underbody temperatures.

According to Ford, prolonged exposure to elevated underbody temperatures might cause degradation of the fuel tank and fuel vapor lines, as well as parking brake cable seal deterioration.

As a result, the vehicle could suffer a fuel leak – increasing the risk of a fire – or impaired brake function – leading the vehicle to suffer unexpected movement.

Ford says it is unaware of any accidents, injuries or fires related to the issue.

Dealers will replace the current fuel tank shield with a shield with better insulating capability, install thermal patches on the fuel tank and parking brake cable, and install thermal wraps on the fuel vapor lines.

Ford Issues Two Safety Recalls In North America [Ford]

FIFA Officials Arrested On Racketeering, Bribery, Money Laundering Charges

Wed, 2015-05-27 16:36

(Tom Fassbender)

(Tom Fassbender)

The world’s most prominent soccer organization has been rocked this morning with the arrest in Switzerland of multiple officials of the Fédération Internationale de Football Association (FIFA) and several allied businesses on charges that include racketeering, bribery, wire fraud and money laundering. The Justice Dept. claims the defendants have been enriching themselves through corruption for more than two decades.

Among those charged today were Jeffrey Webb, a FIFA VP and the current president of CONCACAF, the soccer group’s governing body for North America, Central America, and the Caribbean. He was one of the seven defendants arrested earlier this morning. Webb’s predecessor, Jack Warner, has also been charged. Meanwhile, a search warranted has been executed at CONCACAF offices in Miami.

FIFA and its multiple subsidiary bodies rake in billions of dollars each year in revenue from from media and marketing rights associated with its events, especially tournaments like CONCACAF’s Gold Cup and the FIFA World Cup.

According to the DOJ, since 1991, the defendants and their co-conspirators engaged in fraud, bribery and money laundering for personal gain by allegedly making deals with sports marketing executives who paid bribes and kickbacks to keep their competitors from involvement in FIFA events.

The FIFA officials involved in today’s announcement allegedly received more than $150 million in illegal payments from these executives. While most of the schemes detailed in the indictment involve kickbacks related to CONCACAF and CONMEBOL (FIFA’s South American governing body) tournaments, there are also allegations of illegal influence in the selection of South Africa as the host country for the 2010 World Cup.

A handful of defendants have already entered guilty pleas, some going back as far as July 2013. Those were unsealed today. These include Charles Blazer, a former CONCACAF general secretary and a former FIFA executive committee member, who pleaded guilty to a 10-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy, income tax evasion and failure to file a Report of Foreign Bank and Financial Accounts. He forfeited over $1.9 million at the time of his plea and has agreed to pay a second amount to be determined at the time of sentencing.

The owner and founder of the Traffic Group, the Brazilian sports marketing conglomerate, pleaded guilty to charges of racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy and obstruction of justice. He agreed to forfeit over $151 million, $25 million of which was paid at the time of his plea.

Defendants in the indictment face maximum jail terms of 20 years for the alleged RICO conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering and obstruction of justice charges.

“The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” said Attorney General Loretta Lynch. “It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks. And it has profoundly harmed a multitude of victims, from the youth leagues and developing countries that should benefit from the revenue generated by the commercial rights these organizations hold, to the fans at home and throughout the world whose support for the game makes those rights valuable.”

FIFA has come under fire in recent years over rumors of graft and corruption, and for exerting too much influence in the areas where it hosts the World Cup. For example, during the most recent Cup, FIFA convinced Brazil to change a law banning the sale of alcohol at soccer games so that it could continue to reap advertising revenue from Budweiser.

More controversial is the upcoming 2022 tournament in Qatar, which have been heavily criticized for taking place in a country with a horrendous human rights record, especially with regard to women and the migrant workers who are constructing the many venues needed to host the World Cup. Groups have called for sponsors of the World Cup to pull out of their backing of the Qatar games, but so far big-name brands like Visa and Coca-Cola have decided to remain involved.

Houlihan’s Apologizes For Turning Away Veteran With Service Dog

Wed, 2015-05-27 16:26

Not the Houlihan's in question. (ChrisYunker)

Not the Houlihan’s in question. (ChrisYunker)

National chain Houlihan’s has fired a manager at a Chicago-area restaurant and apologized to an Army war veteran who says he was refused a table for lunch on Sunday because he had his service dog with him.

A 32-year-old who says he has post-traumatic stress disorder after serving for more than nine years on tours in Iraq and Afghanistan was accompanied by his Labradoodle — wearing a red service cape — and his mother for lunch over the weekend.

According to the group, a Houlihan’s hostess as well as her manager questioned the need for the service animal and said dogs weren’t allowed inside when the group walked into the restaurant, reports the Elgin Courier-News.

The family went to another restaurant nearby and were served without a problem, they say, but the vet’s mom posted about the experience on her Facebook page as well as Houlihan’s, in order to spread awareness.

The vice president of operations for Houlihan’s Restaurant Group said she and the company were “mortified” to hear of how the veteran and his dog were treated, noting that the manager had been fired and the restaurant is donating $2,000 to Pets for Vets, upon the vet’s recommendation.

The vet, his parents and his dog all went back to Houlihan’s on Monday, where the company says they all “had a nice conversation” about how the restaurant could do better in a similar situation the next time. That’s when the veteran and his family suggested the donation to Pets for Vets, to help cover the cost of training service dogs for others.

“We are sincerely apologetic for the lack of respect and compassion that this veteran and his family experienced in our restaurant,” she said, adding that it’s company policy to welcome service dogs in all Houlihan’s restaurants.

“He helps keep me calm … alerts me when there is something wrong,” the vet said of his dog, adding of the Houlihan’s experience that his canine companion “was just there to comfort and calm me down afterwards. I was rather upset.”

He says that Houlihan’s management “apologized profusely” and adds that he thinks the company is sincere.

Restaurant apologizes for turning away vet with service dog [Elgin Courier-News]

Reynolds, Lorillard Must Sell Four Brands To Gain FTC’s Approval Of $27.4B Mega-Cigarette Merger

Wed, 2015-05-27 15:32
cig

(Rosalyn Davis)

You may recall that last July the No. 2 and No. 3 cigarette brands in the country announced thy were planning to go all in on a $27.4 billion merger. This week the two companies received the blessing from federal regulators, as long as they divest four cigarette brands to a British-based company.

The Federal Trade Commission announced Tuesday that betrothed tobacco companies R.J. Reynolds American Inc. – the maker of Camel and Pall Mall – and Lorillard – the maker of Newport cigarettes – have agreed to sell a total of four brands to settle regulator’s concerns that the mega-merger would be anticompetitive.

The proposed purchase by Reynolds would create a formidable rival for current top cigarette company Altria Group, the maker of Marlboros. Altria currently accounts for 46% of the U.S. cigarette market, while Reynolds has about 25% and Lorillard about 12% of the market.

Under the proposed divesture order [PDF], Reynolds will divest three brands – Salem, Kool and Winston – and Newport will divest its Maverick brand to Imperial Tobacco Group.

Imperial Tobacco Group currently has a competitive presence in about 70 counties, but a relatively small presence in the U.S. By taking over the four brands, the company will be a more substantial competitor for the new Reynolds and current cigarette leader Altria, and become the third-largest cigarette maker in the U.S.

According to the FTC’s complaint [PDF], the merger raised significant competitive concerns as it had the potential to eliminate current and emergent competition for Reynolds and Lorillard in the U.S. market.

Additionally, the FTC determined that without divesture there was a likelihood that the merger would unilaterally raise prices, and that coordinated interaction would occur between Reynolds and Altria.

In addition to divesting the four cigarette brands, Reynolds must divest to Imperial the Lorillard manufacturing facilities in North Carolina and provide Imperial the opportunity to hire most of the existing management, staff and salesforce.

The newly merged companies must also provide Imperial with retail shelf space for a short period of time and to provide other operational support during the transition.

The FTC’s decision to require Reynolds and Lorillard to divest several brands doesn’t come as much of a surprise, as the two companies attempted to proactively escape regulatory scrutiny by proposing they would sell brands to Imperial.

At the time of the merger announcement, the companies planned to sell Kool, Salem and blu eCigs brand for $7.1 billion.

The proposed merger is expected to give Reynolds over $11 billion in revenue and approximately $5 billion in operating income to invest in innovation, consolidate production, sales and overhead – all of which worried health advocates.

“There’s serious concern that a merged company with increased resources poses a real threat to increased tobacco marketing to America’s kids,” says Matthew Myers, president of the Campaign for Tobacco-Free Kids said last July. “This is a marriage of Joe Camel and Newport — two brands that have played a major role in youth tobacco use.”

The Food and Drug Administration has put emphasis on curbing teen smoking this year with its first ever anti-smoking campaign aimed at teens. The $115 million multimedia education campaign aims to show youth the true costs and health consequences of smoking by focusing on how tobacco affects one’s outward appearance.

FTC Requires Reynolds and Lorillard to Divest Four Cigarette Brands as a Condition of $27.4 Billion Merger [Federal Trade Commission]

Hormel Gobbling Up Applegate Farms For $775M

Wed, 2015-05-27 15:28

Screen Shot 2015-05-27 at 9.22.53 AMIn a sign of the times, Hormel Foods Corp., the maker of Spam, is trying for that natural foods feeling and has decided that buying Applegate Farms for $775 million is the way to achieve it.

The acquisition is expected to close in the next two months, reports Bloomberg News, as Hormel eyes all those organic-minded customers buying apple sausages and “natural” bacon.

Applegate Farms will be bringing a slew of natural and organic sausages, hot dogs, cold cuts, chicken strips and other meat products to Hormel, under a brand that sources meat from around 1,800 family farms.

Putting Spam and natural food together under one roof might seem odd, but Applegate will still operate as its own brand inside the company, with some Hormel workers heading to work at Applegate’s offices in New Jersey.

Applegate Farms addresses the move on its website, with a FAQ section about why it decided to sell itself to Hormel, while reassuring customers that it’ll have the “same products” “same standards” and “same mission: to change the meat we eat.”

“The only difference now is that our new partner, Hormel Foods, will offer more opportunity to find your favorite Applegate products in more places,” the site says, with a link to another statement by company founder Stephen McDonnell about the merger.

He writes of having a stroke in December 2013 that has made it harder for him to lead, and that he believes Hormel is buying the company “because they believe we are doing something right.”

“For years I’ve been saying to anyone who would listen that the Applegate model of antibiotic-free, humanely raised animal agriculture could be scaled up and that the big meat companies should get on board. This is it,” writes McDonnell.

Hormel isn’t the first big food name to buy into the natural aisle of the grocery store: Last year General Mills agreed to buy Annie’s Inc., a company that peddles organic snacks like bunny crackers and fruit snacks as well as salad dressings and pasta mixes for $820 million.

Hormel Foods Agrees to Buy Applegate Farms for $775 Million [Bloomberg]

Big Data Predicts Pollen Levels, Keeps Allergy Medicines In Stock

Wed, 2015-05-27 14:30

 pollen. (Karen Chappell)

The enemy: pollen. (Karen Chappell)

Here in the Northeast, people who are allergic to pollen are having a harsh spring. They should take comfort, though, that there isn’t a corresponding shortage of allergy medicines, as there apparently was five years ago. Drug companies have learned how to take global climate data and turn it into more plentiful antihistamines when people need them.

Bayer, for example, is the maker of Claritin, a pretty standard and popular new-generation antihistimine. According to the Wall Street Journal, Bayer plans its entire supply chain for Claritin as early as nine months in advance, and uses software that models climate patterns to predict levels of popular allergens, then make sure that those areas stay supplied. Real-time and past years’ sales data are important, too, but weather is an important variable in how demand for a certain medication can change.

This spring, pollen levels are apparently up 25% on the coasts of the United States, which explains why people allergic to pollen are so unhappy, and why my car looks green. Experts say that this is because plants are spewing pollen, but there has been less rainfall than usual, which means that the pollen continues to float around, hitting humans in the face and causing allergic reactions.

Using weather models has other applications outside of allergy drugs, but those are trickier since other health conditions don’t map as precisely as pollen levels do to allergic reactions. You can try to predict demand for cough medicine along with spans of cold temperatures, for example, but that’s imprecise. If you can predict pollen levels, though, you can probably predict demand for allergy medicines.

Big Data Brings Relief to Allergy Medicine Supply Chains [Wall Street Journal]

FTC Affirms Consumers’ Right To Go To Court Over Warranty Disputes

Wed, 2015-05-27 00:23

(Ryan Glenn)

(Ryan Glenn)

In just the last four years, the U.S. Supreme Court has twice ruled against consumers’ rights and in favor of companies that use fine print in their contracts to block wronged customers from suing in court and from joining together as a class action. In spite of these rulings, the Federal Trade Commission recently upheld rules that give warranty buyers the right to a day in court, even if they have to go through arbitration first.

Under the Magnuson-Moss Warranty Act of 1975, the FTC is responsible for interpreting and reviewing the rules guiding warranties.

While these rules don’t bar warranty providers from requiring that customers enter into arbitration for dispute settlements, § 703.5(j) states that an arbitrator’s decisions “shall not be legally binding on any person.”

This is very different from the increasingly popular mandatory binding arbitration that so many companies — particularly financial institutions and telecom providers — have been inserting into their terms of service and contracts.

In those binding situations, not only is the customer forced into individual arbitration — a process that is heavily unbalanced in favor of the larger company — but the decision of the arbitrator is final.

§ 703.5(j) makes sure that warranty customers still have the right to take their matter before a court. The arbitrator’s decision can be introduced as evidence, but that’s it.

During the FTC’s recent review process of the warranty rules, the Association of Home Appliance Manufacturers called for the removal of § 703.5(j), saying “it creates disincentives for manufacturers or sellers” to offer arbitration in the first place.

While two federal appeals courts have ruled that the Magnuson-Moss act doesn’t prohibit binding arbitration, the FTC has repeatedly held that the 1975 law never intended for arbitration rulings to be the ultimate say in a dispute.

The Commission points to § 2310(a)(3)(C) of this law, which deals with informal dispute settlement procedures.

The law states that “any decision in such procedure may be admissible in evidence” in “any civil action arising out of a warranty obligation.” To the FTC, this clearly implies that the legislators saw arbitration as a first step that could resolve some disputes, but not the final, binding word on all disputes.

Some opponents of this rule also claim that arbitration doesn’t come under the umbrella of “informal dispute settlement mechanisms” [IDSM] and therefore Magnuson-Moss doesn’t apply to these procedures.

“[A]ny arbitration proceeding is, by comparison to judicial proceedings, an ‘informal’ ‘mechanism’ for ‘dispute settlement,'” counters the FTC, “and it thus falls squarely within the plain meaning of the term ‘informal dispute settlement mechanism.'”

In addition to retaining the prohibition on binding arbitration, the FTC is adding to § 700.10, which that limits warrantors’ tying of warrantees to select parts or service providers.

In its current form, that rule prohibits a company from voiding a warranty just because a customer uses someone other than an authorized dealer or authorized replacement parts for non-warranty work. In other words, if your laptop screen dies while under warranty, the manufacturer shouldn’t be able to say the warranty was voided just because you replaced the sound card.

The revised rule clarifies that this extends to the mere implication of voiding the warranty for customers who choose to use parts and services unrelated to the manufacturer.

“[W]arranty language that implies to a consumer acting reasonably in the circumstances that warranty coverage requires the consumer’s purchase of an article or service identified by brand, trade or corporate name is similarly deceptive,” reads the revised rule. “For example, a provision in the warranty such as, ‘use only an authorized ‘ABC’ dealer’ or ‘use only ‘ABC’ replacement parts,’ is prohibited where the service or parts are not provided free of charge pursuant to the warranty.”

A real life example of this case occurred recently, with BMW reaching a settlement deal with the FTC for telling drivers of the company’s Mini vehicles that the only way to maintain a vehicle’s safe operation and value is to “have routine maintenance performed only by Mini dealers unless the representation is true and BMW can substantiate it with reliable scientific evidence.”

IRS: Thieves Obtained Information On 100,000 Taxpayers From Transcript System

Tue, 2015-05-26 23:07

(Jimmybionic)

(Jimmybionic)

A tax transcript is a document from the IRS that shows key information from tax returns that you’ve already filed, or changes to what you and the government owe each other that may have been made after the return was filed. You can normally order them online, but the system is now closed after the IRS learned that people identified only as “thieves” accessed transcripts for about 100,000 people.

If you’re one of the unlucky 100,000, the IRS says that they will contact you so you can take precautions. To access a person’s transcript, someone would need some key personal information about them that isn’t all that hard to find, like their Social Security number, tax filing status, address, and birthdate. While a stolen tax return can be very valuable to an identity thief, the culprits would have already used the most important pieces of personal data to obtain the transcripts in the first place.

The main filing system was not breached, the IRS assures the public: only the system that generates transcripts. The same group of thieves made an estimated 200,000 attempts from what the agency called “questionable email domains” to request transcripts with ill-gotten personal information.

APNewsBreak: IRS says thieves stole tax info from 100,000 [Associated Press]

FTD, Classmates Inc. To Pay $11M To Resolve Multi-State Allegations Of Deceptive Advertising

Tue, 2015-05-26 22:24

adsThe attorneys general from 22 states signed an $11 million settlement with a national flower delivery service and social networking site today to resolve allegations that the two companies misled consumers into buying subscription services they didn’t want.

Florists’ Transworld Delivery, Inc., its subsidiary FTD.com and online social networking company Classmates, Inc., allegedly violated state consumer protection laws by allowing third-party marketers to charge online customers who failed to expressly opt-out of a membership program, according to the New Jersey Attorney General’s office.

According to the settlement [PDF], the companies, which were previously subsidiaries of United Online, Inc., engaged in deceptive advertising and billing practices for nearly nine years.

“Businesses have a duty to be clear, direct and honest when advertising, and to respect consumer privacy laws by not sharing sensitive credit card and debit card account information without proper disclosure and/or consumer consent,” New Jersey’s Acting Attorney General John Jay Hoffman said in a statement.

In addition to New Jersey, states involved in the investigation and subsequent settlement include Alabama, Alaska, Delaware, Florida, Idaho, Illinois, Kansas, Maryland, Maine, Michigan, Nebraska, New Mexico, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Vermont, Washington and Wisconsin.

Tuesday’s settlement stems from a multi-state investigation that found FTD and Classmates took part in a practice known as negative option marketing.

Consumers who visited websites controlled by FTD and Classmates tell the AGs they were often sold “trial term” subscriptions for goods and services by third-party marketers using the companies’ websites.

The AGs alleged that those customers were not adequately informed that the subscriptions would renew automatically once the trial period ended, and that their credit cards would be billed for the renewal until the consumer actively canceled the subscriptions.

The investigation found that these deceptions were made possible because FTD and Classmates allowed sales and membership offers – such as discount clubs, travel rewards and insurance programs – by third-party marketers to pop-up during online consumer transactions.

In some cases, the pop-ups displayed FTD and Classmates logos, leading consumers to believe that they were still doing business with the two companies even when they weren’t.

Customers who signed up for the third-party promotions were typically charged an initial trial period.

When the trial period ended, a “free-to-pay” aspect of the deal was triggered. However, the investigation found that portion of the deal was not adequately disclosed, and resulted in consumers unwittingly being billed for paid memberships or subscriptions.

According to the investigation, in order to pay the third-party marketers, Classmates and FTD allegedly engaged in “data passing” – the sharing of consumers’ data including their personal billing information without properly disclosing the practice to customers.

In addition to allegedly being duped by the companies, customers tell the AGs that when they became aware of the added charges, they found it difficult to cancel their subscription.

Under the settlement, FTD will pay $8 million to the 22 states involved, while Classmates will establish a $3 million restitution fund for customers who were enrolled in the subscription service without authorization or were unable to cancel their subscription.

The New Jersey Attorney General’s Office reports that to be eligible for restitution, consumers must have purchased subscription services from Classmates between January 1, 2008 and May 26, 2015.

Despite agreeing to pay a combined $11 million in penalties and restitution, the two companies do not admit any wrongdoing or liability.

New Jersey Joins Multi-State Settlement Resolving Allegations That FTD, Classmates Inc. Engaged in Deceptive Ad Practices [New Jersey Office of the Attorney General]

Target Clarifies: They Reserve The Right To Ban Resellers

Tue, 2015-05-26 21:49

(JeepersMedia)

(JeepersMedia)

Target’s collections of downscale versions of products from big-name designers are hot sellers, and the quick disappearance of this year’s Lilly Pulitzer collection from its physical and virtual shelves followed the pattern. A month after that, people began to report that they were being banned from making purchases from Target because they bought too much. No, Target wasn’t rejecting capitalism: the retailer confirmed that they were taking action to deter resellers.

You may remember that the Lilly Pulitzer collection sold out so quickly that the company had to take action to prevent its website from crashing. it appeared that they were trying to prevent resellers from buying up merchandise and flipping it for more money elsewhere. Arbitrage is the simple practice of buying something and then selling it elsewhere at a higher price. That’s not a new invention, but the Internet has made it a lot easier to engage in arbitrage by picking up a few shift dresses at Target and listing them on eBay.

Target says that they aren’t banning all resellers outright, but re-emphasized in a statement to eCommerceBytes that they reserve the right to limit how much they sell to any given person, and a recent change to this policy includes allowing stores and their e-commerce division to limit sales to people who are obviously reselling merchandise.

At Target, we put our guests first and are committed to offering a convenient shopping experience. In order to ensure we have the inventory of products to meet our guests’ needs, we recently established a new policy that reserves Target the right to prohibit purchases to resellers. It is not a new policy for Target to reserve the right to limit quantities on orders. Guests will be notified at the time of purchase if quantity limits will be applied.

Target Explains New Policy on Resellers [eCommerceBytes]

Mystery Drone Operator Drops Cash On Lunchtime Crowd In Michigan City

Tue, 2015-05-26 21:35

(MLive.com)

(MLive.com)

For all those times you’ve wished it would suddenly start raining money, the odds are you haven’t been that lucky… yet. The lunchtime crowd enjoying the great outdoors in Grand Rapids, MI enjoyed a fleeting brush with unexpected fortune when a mysterious drone flew over head, dropping cash as it flew.

According to MLive.com, who had an employee on the premises when the drone flew over downtown around 12:30 p.m. today, people were scurrying around with joy. As one does when MONEY IS FALLING OUT OF THE SKY.

“It was hovering over the center of the circle and after a couple of minutes it dropped what appeared to be money,” the employee recalled. “Once people realized the cash was real, they swarmed to pick it up.”

It appears that all the money was single dollar bills, with about $50 getting dropped before the drone went on its merry way.

The MLive worker at the scene said it appeared the operators were standing on top of the JW Marriott hotel nearby, but officials at the hotel said they had no knowledge of a planned promotion or other occasion for a drone flight.

Mystery drone drops cash on downtown lunch crowd [MLive.com]

Lawmakers Criticize Plan To Bottle Springwater In Oregon During Drought

Tue, 2015-05-26 21:34

(Yusuf C)

(Yusuf C)

Drought conditions in some parts of the country have people distressing jeans with ozone and painting their lawns green. Yet one industry keeps guzzling water and attracting the ire of the lawn-painting public: water-bottling operations.

In practical terms, not bottling water wouldn’t conserve very much of it, and also would mean that the same amount of water bottled somewhere else would have to be trucked in. “We’ve determined that bottled water serves a good use, especially in drought-stricken areas where people’s wells have gone dry,” a spokesperson for the state water control board told CNN. (warning: auto-play video)

The image of large corporations like Nestle and Starbucks bottling up water from agricultural regions in California affected by the drought and sending it out of the area reflects poorly on everyone involved. After a flurry of publicity against companies bottling water during a drought, Starbucks announced that it would bottle its Ethos brand of water in Pennsylvania.

Nestle, however, isn’t moving their bottling operation, but they would like to tap some nice springwater up in rural Oregon. After working out an arrangement with the state government, the plan could go forward. There’s one problem, though: the drought issues in other western states are affecting parts of Oregon, and even state legislators are concerned about the plan to bottle Oregon’s water when other parts of the state could use it, too.

Nestle Bottled-Water Plan Draws Fight in Drought-Stricken Oregon [Bloomberg News]

Amazon Trying To Lure Etsy Sellers To New “Handmade” Marketplace

Tue, 2015-05-26 20:52
(Jeffrey)

(Jeffrey)

Amazon is apparently not content with just allowing third-party vendors to sell mass-produced items through the website. The online retail giant is reportedly prepping a new marketplace for customized, unique products, setting up a potential showdown with Etsy.

The Wall Street Journal reports that the e-tailer has begun readying its new marketplace, known as Handmade, by reaching out to current Etsy vendors.

Amazon reportedly sent the sellers invitations to sign up for the forthcoming marketplace and asked them to participate in a survey regarding the types of products they specialize in.

“We’re offering artisans like you a first peek at Handmade, a new marketplace for handcrafted goods,” the Amazon email states.

While the correspondence didn’t provide information on when the new marketplace would launch, it did offer a few details about what customers might find there. Categories offered in the questionnaire include those targeted toward apparel, babies, pets, jewelry and home and kitchen items.

Several vendors who were approached by the online retailer tell the WSJ their interests were piqued after receiving the email.

An Indiana-based handmade jewelry maker says she was surprised to see the invitation from Amazon. While she currently sells about 1,300 products through Etsy, the larger Amazon audience is inciting.

“Amazon has such huge traffic numbers on their website already, it’s pretty appealing,” she said. “I am probably going to do it.”

Another jewelry maker, based in the Philippines, said she would consider Amazon’s new site.

“It’s a good idea not to put all your eggs in one basket, and joining another handmade marketplace would make me feel like I’m not so dependent on Etsy for income,” she tells the WSJ.

Still other vendors have expressed concern over high fees and strict shipping guidelines.

Since many of goods being sold on Etsy are made on demand, some sellers worry they wouldn’t be able to meet Amazon’s strict guidelines, including the possibility that Prime two-day shipping may be included on the marketplace.

According to the WSJ, Etsy takes a 3.5% commission and a 20-cent listing fee for sellers. Amazon, which hasn’t released fees for the new marketplace, currently charges sellers a fee depending on the product they sell, on average that translates to a 15% fee on the price of each sale.

Amazon Targets Etsy With ‘Handmade’ Marketplace [The Wall Street Journal]

A Few More Dodgers Fans Will Finally Get To Watch Them On TV Thanks To Charter/TWC Merger

Tue, 2015-05-26 20:21

The circled lavender areas are among those that will finally get access to Dodgers broadcasts in the coming weeks. No word on when, or if, customers of Cox (or DirecTV or Dish) will also be able to watch the team.

The circled lavender areas are among those that will finally get access to Dodgers broadcasts in the coming weeks. No word on when, or if, customers of Cox (or DirecTV or Dish) will also be able to watch the team.

The Los Angeles Dodgers currently hold a narrow lead in the National League West over the San Francisco Giants, but many Dodgers fans can’t watch their favorite team play because Time Warner Cable hates everyone who doesn’t have Time Warner Cable and has been unwilling to share the SportsNet LA network it co-owns with the team. That is until today, when Charter and its well-heeled backers lobbed $55 billion their way.

Charter has around 300,000 customers in the L.A. area, and just like all the other major pay-TV providers in the region, it refused to pay TWC’s price for carrying a cable channel that doesn’t even carry any of the other L.A. area teams’ games.

But with the Connecticut-based cable company now betrothed to TWC, Charter’s CEO Tom Rutledge says that customers in areas like Burbank, Glendale, Long Beach, and Malibu will be getting access to SportsNet LA in the coming weeks.

Time Warner Cable recently released a statement that if people want SportsNet LA “we encourage them to switch to a provider that carries the network,” without any regard to the fact that the hundreds of thousands of Charter and Cox customers have no options for switching to another cable company.

But Rutledge, who will take over as CEO of the merged companies, is being less miserly about the channel.

“We want the Dodgers on every outlet and we are committed to making that happen,” he told the L.A. Times in an interview after announcing the merger.

He also said that the company would need to take a serious looks SportsNet LA’s finances. The channel has been losing money as owners balked at lowering their asking price or at the idea of putting the station on a premium sports tier for only customers who want it.

While Charter will carry the channel, it remains to be seen if TWC will ease its stranglehold on Dodgers broadcasts as the company prepares to once again venture into the waters of regulatory review.

Facebook Will Include Critics’ Reviews On “Select” Restaurant Pages

Tue, 2015-05-26 20:18

(Capt. Brick)

(Capt. Brick)

In what appears to be another effort to keep its users inside the social media site’s loving embrace, Facebook is reportedly going to include critics’ reviews of restaurants on the pages of “select” establishments in the United States.

According to a report from The Verge, those reviews will now show up alongside reviews left by friends on Facebook when you search for restaurants on the site and, ostensibly, its mobile app.

It’s part of a partnership with Bon Appetit, Conde Nast Traveler, Eater.com, New York Magazine and the San Francisco Chronicle. That might indicate that the pilot project will be taking place in at least San Francisco and New York.

“Since reviews are such an important part of helping people make informed decisions about what to do locally, we’re excited to be incorporating a new way for people to use Facebook to find the best real-world experiences,” a Facebook spokeswoman told The Verge.

There doesn’t appear to be an official announcement of the venture by Facebook yet, or details about whether or not restaurants will be allowed to curate which reviews show up on their pages.

Facebook begins adding critics’ reviews to restaurant pages [The Verge]

Why Charter Thinks Their Plan To Buy TWC Is Different Enough To Succeed Where Comcast Failed

Tue, 2015-05-26 19:56

timecharterlogoAfter months of rumors, this morning it became official: Charter plans to step in where Comcast failed, with a $55 billion plan to acquire Time Warner Cable. Regulators looked unfavorably on Comcast’s bid, finding it would have too many negative effects on consumers and on competition. But Charter clearly would not be trying its own takeover, with such a huge price tag, if they didn’t think they stood a good chance of success. So what makes the second offer so different from the first — and is it any more likely to succeed?

Charter CEO Tom Rutledge said in a call this morning, “We’re a very different company than Comcast, and this is a very different transaction,” which is true.

“Different,” of course, does not necessarily mean “better.” Advocacy group Free Press, for example, has already released a statement saying that the Charter/TWC deal raises “similar public interest concerns” to the failed Comcast purchase, and adding, “Charter will have a tough time making a credible argument that consolidating local monopoly power on a nationwide basis will benefit consumers.”

But a few big differences, in this case, might just add up to “acceptable” in the eyes of the FCC and Department of Justice.

The Comcast Counterweight
To understand where the cable industry is going, one first needs to understand where it is right now. In business, size matters. As of their latest earnings reports (except for Cox, which is privately held), here’s where the landscape lies today:

  • Comcast: 22.3 million customers
  • Time Warner Cable: 11.9 million customers
  • Cox: about 6 million customers
  • Charter: 5.9 million customers
  • Cablevision: 3.1 million customers
  • Bright House: 2.5 million customers

Had Comcast and Time Warner Cable merged and completed their three-way customer handoff, new-Comcast would have remained the industry leader with 30 million customers and Charter, through GreatLand, would have picked up an extra 2.5 million.

But of course, that didn’t happen. This merger, however, might. Charter’s arithmetic, which includes business customers, says that the transaction will give the new Charter a combined 23.9 million customers in 41 states.

Even using the residential customer numbers above, however, the combined company would easily have over 20 million customers. And either way you shake it, that puts them right in a competitive 1-2 situation with our existing dominant player, Comcast. If the TWC and Bright House acquisitions go through without spin-offs or concessions, that would make the new cable landscape look like this:

  • New Charter: 24 million customers
  • Comcast: 22 million customers
  • Cox: about 6 million customers
  • Cablevision: 3 million customers

Charter’s reasons for wanting to spend a ludicrous amount of money on this deal, then, are pretty clear cut. The new company would vault from the middle of the pack to the head, suddenly becoming a force to contend with. The only company larger would be the still-pending merged AT&T/DirecTV — and they would exceed Charter in video customers, but not broadband ones.

New-Charter's footprint, from Charter's investor presentation on the merger.

New-Charter’s footprint, from Charter’s investor presentation on the merger.

Where size was an obstacle for Comcast when it came to wooing regulators, for Charter it may prove to be an asset. Comcast was (and is) already the largest cable company in the nation. Buying the second-largest would have vaulted it so far ahead that the also-rans couldn’t be considered actual competition, and would have given it undue influence up and down the business chain, as well as over customers.

But the second, fourth, and sixth largest companies, joining together to form a company about the same size as the current number one? Well, that’s a different matter. The FCC and DoJ might determine that although end consumers would be losing options, as far as the national-scale marketplace goes, creating a counterweight to Comcast may in some ways actually increase competitive pressures. Starting a new competitor from scratch is not going to happen — but building one from a handful of smaller companies might succeed.

Vertical Integration and Bad Behavior
It’s not just in the arithmetic where Charter benefits heavily from not being Comcast.

Comcast is way more than “just” a cable company. In addition to pay-TV and voice services, they are, most importantly, also a broadband provider and a content company. Comcast’s unusual reach has created a situation where, as it expands, it grows ever-increasingly in competition with itself as well as with everyone else around it.

Those were the core antitrust arguments against letting Comcast get bigger by buying TWC. Comcast, as a platform with their own video streaming service, as well as broadband service, as well as pay-TV, is in a position heavily to control what can move across its networks, to whom, and how.

While the new open internet rule will prevent much nefarious behavior, the fact of the matter is that Comcast does not exactly have a great track record. Their public reputation in basically every sphere is very negative… and they’ve earned it.

Their customer service is legendarily bad, with Time Warner Cable at the bottom of the heap with them. Many of Comcast’s worst service nightmares in recent years have been recorded and traveled far and wide over the internet at the speed of, well, your local broadband provider, and it’s been ugly all around.

Additionally, lawmakers and regulators casting an eye over Comcast’s TWC purchase plan had a history to look at: Comcast’s behavior after acquiring NBCUniversal in 2011. And that record likewise was not good. Comcast had to agree to many merger conditions to make the NBCU purchase palatable to regulators in 2011, and by 2014 had already missed some deadlines and incurred some fines for not doing so.

And then the interconnection disputes between Comcast and Netflix hit, and were resolved only when Netflix cut Comcast a big fat check for better access to Comcast subscribers who were already paying Comcast for their internet access.

All of that forms a very bad tapestry against which to try to convince regulators that your plan to become enormous is sound and harmless. And all of it makes a big pile of poo in comparison to which Charter can come off as clean and shiny.

When it comes to customer service, Charter’s reputation is mixed. But in comparison to Comcast, it’s well ahead by virtue of not having had any internationally viral terrible service recordings in the past year.

And as for a business reputation? Charter actually went bankrupt in 2009 but emerged successfully from restructuring, going back on the NASDAQ in 2010. Whether or not it’s a good idea for them to take on debt again to buy TWC is a matter for investors to decide. But they’re probably not going to have media companies lined up around the block to say why they’re so terrible to work with, either.

So Will It Happen?
It might! And it also might not. Right now, it’s just too soon to tell.

There’s no knowing what the proposed transaction will look like until it’s actually filed. The process is about the same as the now-defunct Comcast approval process, but the players are new.

FCC chairman Tom Wheeler went out of his way last week to contact the CEOs of Charter and Time Warner Cable to let them know that the FCC is not necessarily hostile to all cable mergers. The commission, Wheeler reiterated, will judge each case on its own merits, as it should.

The broadband competition situation is no better now than it was last year, except in a handful of cities. Mobile data is still not really competition, and “broadband” is still mostly not.

Regulators will have to weigh those issues against all of the comments, petitions, and data that are about to start flowing in from businesses, advocates, and consumers. Wheeler said about the merger that “an absence of harm is not sufficient,” and that the companies will have to prove that their merger is actively in the public interest to succeed.

We know only one thing for sure right now: in the world of cable, it’s about to be another long year.

Target Math Means You Pay Extra For Cardboard Box, Less Choice

Tue, 2015-05-26 19:48

Bulk buying is good. When you buy multiple food pouches that come in a single box, for example, it makes life easier for cashiers and maybe for you when you unload your groceries. That’s what Jared thought when he went to buy some baby food pouches at Target.

The photo shows a single food pouch priced at $1.39, and then a four-pack of the same size costs $5.99. That's a 44¢ surcharge.

The photo shows a single food pouch priced at $1.39, and then a four-pack of the same size costs $5.99. That’s a 44¢ surcharge.

Then he noticed that, thanks to Target math, it costs more to buy a four-pack of just one flavor than to buy four individual packets, which can be different flavors. That’s just how things work once you’ve entered the magical land of Target.

Why is the pricing like this? Often this kind of confusing math involves temporary sale prices or deals involving gift cards with purchase. Maybe Target wants to move more single pouches in general. Maybe there is a big coupon for the four-pack in the Cartwheel app this week. Whatever Target’s actual logic might be, this doesn’t make obvious sense to consumers, and certainly doesn’t encourage them to buy more baby food pouches.

A few years ago, a Target employee tried to explain some of the retailer’s Reality Vortex policies to us, and that clarified some situations, but not ones like this.

82-Year-Old Rides Wooden Roller Coaster 95 Times In One Day To Reach 5,000 Mark

Tue, 2015-05-26 17:03

(WPXI.com [link has autoplay video])

(WPXI.com [link has autoplay video])

It’s always admirable when someone accomplishes a feat that to the average person appears well, a bit dizzying, and an 82-year-old roller coaster devotee’s recent accomplishment is no different: He celebrated his 5,000th ride on a historic wooden roller coaster in Pennsylvania, completing 95 of those trips in one day over the weekend.

Sitting for more than eight hours straight, the man hit the big milestone on the Jack Rabbit at Kennywood in the Pittsburgh suburb of West Mifflin, reports the Associated Press. He chose to ride 95 times to honor the coaster’s 95th birthday this season.

“I feel great!” said the man, who’s retired from the wholesale grocery business but is a local actor. “I made sure to move my legs throughout the day to keep from getting stiff after sitting so long.”

He’s been riding the world’s fifth-oldest coaster — built in 1920 — since he moved to Pittsburgh in 1959.

To prepare for his dippy day, he drank and ate very little ahead of time since he didn’t want to take a bathroom break. Fans and friends offered him water in between trips, and a paramedic was on hand, just in case. At the end of the day, he walked off unassisted except by his cane, a rep for the park said.

His best tip for others who love riding the twisty, turny rails? Pick the fifth seat in the train, as he says it provides a smoother ride, in the middle away from the wheels.

“If you’re gonna ride over the wheels for a length of time, you’re gonna hurt,” he said.

Roller coaster fan notches 5,000th ride on historic coaster [Associated Press]

How Carl’s Jr. & Hardee’s Became One Giant Burger Chain With Two Names

Tue, 2015-05-26 17:00

Does a fast food chain by any other name smell as… burger-like? Even though Carl’s Jr. and Hardee’s now share (almost) the same menu, the same graphic design elements in their branding, and the same parent company, they still retain their original names and there is virtually no geographic overlap of the two brands. While the only significant difference between Carl’s Jr. and Hardee’s might be their names, for more than 30 years the two companies were worlds apart.

Before CKE Restaurants Inc. brought the companies together in the late ’90s, Carl Karcher and Wilber Hardee dreamed and cultivated their respectives fast food dynasties in different eras for varying reasons and on separate coasts.

Carl’s Jr.: From A Hot Dog Cart To Dotting The West Coast Section Permalink Bookmark Section Share on Facebook Share on Twitter

Starting on the Pacific coast in 1941 – nearly 20 years before future brother-company Hardee’s – Carl and Margaret Karcher borrowed $311 against their car. Together with the $15 they had in savings, the couple spent $325 to enter the fast food business with the purchase of a hot dog cart.

The first day of business, the couple’s sales totaled $14.75, CKE reports in its company history.

Soon after, business began to outpace the capacity of the single cart operating in Anaheim, CA, and the Karcher’s opened three additional carts.

Not quite five years after the cart first opened for business, in 1945, the first stand-alone restaurant – called Carl’s Drive-In Barbeque – opened in Anaheim.

According to the book Fast Food Nation: The Dark Side of the All-American Meal, the Karcher’s split the work at the new restaurant, with Carl cooking, Margaret managing the cash register and carhops serving the meals.

Business soared at Carl’s Drive-In Barbeque following World War II, but a new hamburger joint was booming not far away. With the rise of McDonald’s, Karcher knew he needed to revamp his business plans to keep up with the competition.

By 1956, Karcher had opened the first two Carl’s Jr. restaurants, a smaller version of the company’s original drive-in. Starting in the 1960s, the new restaurants featured quick serve hamburgers, table service, music and the now iconic bright yellow five-pointed Happy Star.

The new Carl’s Jr. also featured a first, according to CKE: a drive-thru window.

In 1964, Carl incorporated into Carl Karcher Enterprises (CKE Restaurants) and continued to build his brand. But with other fast food brands in Southern California, like McDonald’s and Taco Bell, gaining popularity, Karcher began looking to new ventures.

According to Fast Food Nation, Karcher opened several Carl’s Whistle Stops, a railway-themed restaurant, featuring employees dressed as railroad workers, and electric trains shuttling orders to the kitchen. By 1966, the three restaurants were converted to Carl’s Jr. locations.

Another brand from Karcher failed to catch on, the Scot’s coffee shops, where servers wore plaid skirts.

While those ventures couldn’t find an audience, Carl’s Jr. restaurants continued popping up along the coast of California, and by 1976 Karcher Enterprises owned one of the largest fast food chains in the U.S., employing more than 5,000 employees.

The 1980s brought much change to the chain, with higher priced meals and expansions into new states, a move made possible by the company’s first franchisees.

Not long after, Carl’s Jr. began duel branding restaurants with quick-service Mexican food company Green Burrito. But the company’s biggest expansion wouldn’t come until the late ’90s.

Hardee’s: Charring The Competition On The East Coast Section Permalink Bookmark Section Share on Facebook Share on Twitter

While Carl Karcher was in the midst of building his empire in California, Wilber Hardee’s dream of a fast food empire was just beginning in Greenville, NC, in 1960.

Hardee had already opened and operated a series of restaurants and inns, including the Do Drop Inn and Silo Restaurant, in the Greenville area, when he got the idea for a quick-serve burger joint after visiting the state’s first McDonald’s.

“What impressed me was, I set out in front there and saw they took in $168 in one hour,” Hardee told author Jerry Bledsoe. “That was big money then… on 15-cent hamburgers.”

Soon he was able to construct a smaller version of the McDonald’s restaurant that he called Hardee’s Drive-In. The new stores were identifiable by their hexagonal designs.

To further set himself apart from the competition, Hardee used char-grills to give his burgers more flavor, and soon the “charco-broiled” burgers became the hottest item was the restaurant’s quick service menu.

Months after the first location opened, two entrepreneurs, Leonard Rawls and Jim Gardner, approached Hardee about a partnership to create Hardee’s Drive-Ins, Inc., according to the North Carolina History Project.

While the new concept quickly caught on and the partners looked to expand from their first location, Wilber Hardee made the decision to leave the partnership, and sold his half of the company to Rawls and Gardner.

While there are varying stories about why Hardee stepped away from his growing fast food empire, he told Our State magazine that ““I was stupid. That’s what I was. You know how it is — you make mistakes.”

Hardee went on to try his hand at a few other food industry ventures, while the company that bore his name continued to gain popularity.

At the end of the ’60s, the company incorporated into Hardee’s Food Systems and successfully began franchising the restaurant. In all, the corporation operated nearly 200 restaurants in the Midwest and Southwestern U.S., as well as its first international locations in Germany.

The ’70s brought more change for the chain, with the introduction of “made from scratch” biscuits and the opening of the 1,000th restaurant.

In 1981, Imasco — a Canadian company that also owned tobacco brands, and drug stores — acquired Hardee’s. The next year — as we recently told you in our rundown of real-life brands featured on Mad Men — Imasco purchased the Burger Chef chain and converted many of them into Hardee’s locations.

But by the late ’90s the company was struggling to keep pace with competitors, setting itself up for its biggest change to date.

Similar But Not Quite The SameImage courtesy of Morton Fox Section Permalink Bookmark Section Share on Facebook Share on Twitter

With more than 2,500 locations in the Midwest, South and East Coast regions, Hardee’s was a prime target for purchase, and that’s what happened in 1997 when CKE Restaurants came knocking.

According to a WRLA-TV report from 1997, CKE Restaurants paid $327 million for Hardee’s — by then the fourth-largest fast food chain in the nation.

The combination, which made Hardee’s a subsidiary of CKE, was a mutually beneficial deal, giving Carl’s Jr. a better breakfast menu, while strengthening Hardee’s lunch and dinner fare.

In all, the merger crated a chain with 3,828 restaurants, of which 3,152 were Hardee’s and 676 were Carl’s Jr locations, mostly located in California.

Over the next several years, many Hardee’s restaurants were converted to Carl’s Jr., while some other locations were closed for an array of reasons including dwindling sales.

The evolution of the chains continued into the 2000s. Hardee’s added Thickburgers and all the stores adopted what is now known as Star Hardee’s, a take on Happy Star.

A map shows the locations of Hardee's (red) and Carl's Jr. (yellow) locations around the country.   wikipedia user Gage

A map shows the locations of Hardee’s (red) and Carl’s Jr. (yellow) locations around the country.
wikipedia user Gage

While the two fast food joints are clearly related in their branding, their menus continue to showcase their differences. For example, Hardee’s doesn’t serve salads, while Carl’s Jr. has the leafy greens on its menu.

But maybe the biggest difference between the chains is their location.

Carl’s Jr. continues to be located on the West Coast and Southwest states, serving more urban areas, while Hardee’s maintains residency in the Midwest, Southeast and now the Mid-Atlantic, focused on serving less densely populated areas in those regions.

According to the Tumblr maysbynik, the two brands generally keep a fair amount of distance between their locations. The closest they come is about 30 miles apart in the area around Oklahoma and Arkansas.

Today, CKE reports that the Carls Jr./Hardee’s brands employ more than 30,000 workers at 3,036 locations in 43 states an in 13 countries. Of those locations Hardee’s continues to have the upper hand with nearly 1,915 locations, while Carl’s Jr. operates 1,121 stores.

GM Could Face Criminal Charges Over Ignition Defect That Killed More Than 100

Tue, 2015-05-26 16:44

(Paul Pica)

(Paul Pica)

General Motors might be able to wriggle out of class action fraud lawsuits over the long-ignored ignition defect in multiple vehicles that ultimately killed more than 100 people, but the company could still face criminal charges from federal prosecutors.

The Wall Street Journal reports that the U.S. Dept. of Justice is looking to bring criminal charges against the car company for allegedly making misstatements about the ignition switches in the Chevy Cobalt, Saturn Ion and other vehicles.

The exact charges that might be filed are still up in the air, as is the issue of whether GM will go along with a guilty plea, or perhaps a deferred-prosecution deal. Either result would also result in a sizable settlement payment, which is another issue to be sorted out, but would likely be north of $1 billion.

There is also the issue of whether to bring charges against individual employees of GM. Some at the company knew before the affected cars even went into production that there was a problem with the ignition switch. It could be inadvertently turned into the “Off” position by a heavy keychain or if the driver’s knee came into contact with the switch.

If the switch is turned off, the driver loses control of the power steering and braking, making it difficult to operate the vehicle. Additionally, the airbags will not deploy.

Engineers at GM eventually fixed the issue with a revised switch. However, no recall was initiated so all the old cars on the road continued to be operated with the defective ignition. Additionally, the new switch had the identical part number to the faulty one, so the inventory of replacement ignition switches contained both the old and new switches.

In early 2014 — more than a decade after the problem came to light and around 7 years after the fix to the switch’s design was implemented — GM finally got around to initiating recalls totaling around 2.6 million vehicles.

Initially, the company only acknowledged 13 fatalities tied to the defect. However, GM was limiting this figure by only counting deaths that had occurred in the front seats of recalled vehicles where the airbags didn’t deploy and the ignition had been switched off. The car maker did not include rear seat passengers in these cars; victims in other cars who were killed as a result of a crash caused by an affected GM vehicles; or pedestrians struck by a recalled GM car.

GM eventually set up a compensation fund that received thousands of injury and death claims believed to be related to this recall. While the fund has not finished reviewing all claims, it has already acknowledged more than 100 fatalities as a result.

The auto industry had long avoided criminal prosecutions related to defects, but federal prosecutors recently began making it clear that industry is not immune from criminal charges.

In 2014, Toyota reached a $1.2 billion deferred-prosecution deal with federal prosecutors over the car company’s cases of sudden unintended acceleration.

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