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LUBE REPORT: Conventional Oil Costs Carmaker $32 Million

Wednesday, April 30, 2003 VOLUME 3 ISSUE 17  


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Conventional Oil Costs Carmaker $32 Million
By Tim Sullivan
American owners of Mercedes-Benz cars were awarded a $32 million settlement this month on a complaint that their engines may have sustained early wear because they were not advised to use synthetic motor oil.
The class action settlement, approved April 9 by a U.S. District Court judge in Philadelphia, calls for Mercedes-Benz USA to mail vouchers for a free oil change to more than 350,000 owners and lessees of cars from the 1998 through 2001 model years. In addition, the company commits to cover repairs estimated to cost $20 million.
The case involved a Flexible Service System (FSS), included on nearly all Mercedes-Benz cars sold in the United States from 1998 to 2001. The system is designed to help owners lower maintenance costs and to reduce environmental impacts of used motor oil by advising owners when the oil truly needs to be changed. According to Mercedes-Benz, the system begins with a minimum interval of 10,000 miles and adjusts upward as it detects favorable conditions, such as extended highway travel.

Documentation brought forth during the case indicated that intervals ranged up to 20,000 miles, with the average being 12,000 miles.
The problem, according to the plaintiffs, was that owners manuals and promotional materials advised motorists to use conventional motor oils.
“The company’s intentions – to save its customers money and to protect the environment – are certainly commendable,” attorney Kenneth Jacobsen told Lube Report. “But it didn’t work because conventional oils just don’t stand up to those intervals.”
Mercedes-Benz mailed a letter to owners in 2001 advising them to use synthetic motor oils. Ironically, it was that letter that eventually led the original plaintiff, Joseph A. O’Keefe, to file suit.
“He had worked for years in the automotive business, so he thought it was strange when he received this letter from out of the blue recommending that he switch from conventional oil,” Jacobsen said. “He wrote to Mercedes to find out what was going on and received what he considered to be an unsatisfactory answer.”
Jacobsen added that the automaker did not dispute during the case that the intervals recommended by the FSS were too long for conventional oils.
“It was never really an issue,” he said. “They pretty much acknowledged that they had a problem. Their argument was that it wasn’t as big of a problem as what we said and that the case did not merit a class-action suit.”
After the settlement, Mercedes-Benz issued a statement denying wrongdoing and maintaining that conventional API SH and SJ motor oils should withstand the intervals recommended by the FSS without sludging or related engine damage. The statement did not address other aspects of engine oil performance, such as fuel economy preservation or protection of emissions controls. It also noted that the vehicles were factory-filled with oil that “met the same standard as approved synthetic oils.”
Mercedes-Benz USA Public Relations Manager Frederick R. Heiler acknowledged that the intervals for which the FSS was programmed significantly exceed those typically recommended for conventional oils. He noted, however, that typical intervals are “blind” recommendations – that is, made for cases in which neither oil nor driving conditions are monitored.
“A system that monitors oil condition and the amount of highway driving can often prescribe much longer change intervals,” Heiler said. The FSS does not directly monitor oil condition.
The vouchers to be mailed by Mercedes-Benz will pay for installation of synthetic oils. With their face value of $35, that part of the settlement has a price tag of $12.3 million. Judge Franklin S. Van Antwerpen arrived at $20 million for potential repairs based on expert testimony. His decision approving the settlement cited allegations that several thousand owners had reported problems by the time O’Keefe filed his suit.

Copyright © 2003 LNG Publishing Co., Inc. All rights reserved.
Tim Sullivan, Editor. Lube Report, Lubes'n'Greases Magazine and Lubricants Industry Sourcebook are published by LNG Publishing Co., Inc., 6105-G Arlington Blvd., Falls Church, Virginia 22044 USA. Phone: (703) 536-0800. Fax: (703) 536-0803. Website: www.LNGpublishing.com. Email: info@LNGpublishing.com. For sponsor information contact Gloria Steinberg Briskin at (800) 474-8654 or (703) 536-7676 or gloria@LNGpublishing.com.
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