Automakers sue Marathon over damaging gasoline

Refiner blames gauges in U.S. vehicles

October 29, 2005

BY MICHAEL ELLIS
FREE PRESS BUSINESS WRITER

Detroit’s three automakers are suing Marathon Petroleum Co., alleging that the giant oil company sold gasoline in Indiana and Kentucky that had so much corrosive sulfur that it damaged fuel gauges in thousands of vehicles.

Marathon paid $10.2 million to repair damaged cars and trucks but now wants General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group to reimburse the oil company, the lawsuits say.

The car companies sued Marathon in Oakland County Circuit Court in September seeking a jury to declare that they have no obligation to reimburse the oil company.

A small amount of sulfur is normal in gasoline. Marathon is not disputing that the sulfur damaged the gauges; it contends that the gauges were defective. It said most of the repaired vehicles were built by the Detroit automakers.

“They’re coming after us to reimburse them,” said Michael Palese, a spokesman for Chrysler Group. “That was not part of the deal. It was basically their bad gas that caused the problems in their cars.”

Marathon filed motions this week seeking to move the court case to a federal court in Detroit, arguing that sulfur content in gasoline is covered by U.S. regulations. GM and Chrysler officials said that the car companies would oppose the move from Oakland County court. Ford did not return phone calls seeking comment.

The controversy stems from May 2004, when Marathon supplied gas with trace elements of sulfur to Marathon and Speedway stations in the Louisville, Ky., area. The fuel found its way across the Ohio River into southern Indiana.

Thousands of out-of-state visitors were in the Louisville area for the Kentucky Derby. After visitors filed their tanks, fuel gauges on some vehicles malfunctioned. Many motorists ran out of gas, even though their fuel gauge indicated that there was still gas in the tank.

AAA in Kentucky received nearly 1,000 calls in two days from stranded motorists before Marathon took responsibility for the problem, said auto club spokesman Roger Boyd.

“We were busy. Pretty much everybody in our headquarters building had to volunteer to take phone calls,” Boyd said. “You never run out of gas in your own driveway, one member told that to me.”

Marathon set up a hot line for motorists to report fuel-gauge problems and voluntarily paid for repairs.

Only 5% of the repairs were on foreign vehicles, even though foreign automakers have a 43% market share in the Louisville market, Marathon attorney Charles Cassis said in letters sent to the automakers in July.

Of the affected vehicles, 45.6% were GM models, 26.3% were Fords and 23.8% were from Chrysler, the lawsuits say.

“That was one thing that we did notice,” AAA’s Boyd said. “Virtually all the cars we had were American-made.”

The fuel gauges used by the three Detroit automakers contain a metal that reacts with the sulfur, Marathon spokeswoman Angelia Graves said. She said she did not know who supplied the gauges.

GM, Ford and DaimlerChrysler have “for years installed a defectively designed fuel sensor system” in their vehicles, Chassis said in the letters to the three automakers.

Marathon has asked that GM pay $4.66 million toward the cost of the repairs, Ford pay $2.69 million and DaimlerChrysler pay $2.43 million.

Contact MICHAEL ELLIS at 313- 222-8784 or mellis@freepress.com.

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