Dealer Letter

April, 2000

To:
All Ford and Lincoln Mercury Dealers

Subject:
Owner Notification Program 00M10 - 3.8L Engine Head Gaskets - Additional Coverage on Affected Vehicles to 7 Years or 100,000 Miles, Whichever Occurs First, From The Original Warranty Start Date -OR- Through November 1, 2000 or 1000,000 Whichever Occurs First, Regardless of Time in Service. Coverage is Automatically Transferred to Subsequent Owners.

OASIS:
YES

OWNER LIST:
NO

PARTS RETURN:
NO

PROGRAM TERMS:
As stated above

AFFECTED VEHICLES
All 1994 and 1995 model year Mustang vehicles equipped with the 3.8L engine and built at the Dearborn Assembly plant from October 4, 1993 through August 11, 1995.

All 1994 and 1995 model year Thunderbird and Cougar vehicles equipped with the 3.8L engine and built at the Lorain Assembly plant from June 9, 1993 through July 31, 1995.

All 1994 and 1995 model year Thunderbird Super Coupe vehicles equipped with the 3.8L engine and built at the Lorain Assembly plant from June 15, 1993 through July 20, 1995.

REASON FOR THIS PROGRAM
Premature failure of the head gasket(s) may occur. This condition may result in engine coolant leakage which, if not detected, can cause engine overheating. In extreme cases, this condition may result in engine failure. To prevent engine failure, customers should bring their vehicle in for service under this program if the following symptoms exist:

^ Persistent and worsening overheating engine conditions

^ Heavy white smoke from the tailpipe

^ Flashing "Low Coolant" sensor light, even after coolant is re-filled

^ Constant loss of coolant

Owners of affected vehicles are notified that additional coverage for this specific condition is being provided. Coverage is provided for 7 years or 100,000 miles, whichever occurs first, from the vehicle's original warranty start date. Coverage is automatically transferred to subsequent owners.

Vehicles which will exceed 7 years from the original warranty start date within the next few months, will be eligible for this program for a grace period through November 1, 2000, or to 100,000 miles, whichever occurs first.

Ford Motor Company will provide the additional warranty coverage for the use of Ford parts and Ford authorized remanufactured parts, or repairs performed by a Ford dealer, related to this condition.

SERVICE ACTION
For vehicles exhibiting the symptoms described above, dealers are directed to replace failed head gaskets with a re-designed gasket, change the engine oil and oil filter and perform a cooling system flush.

Recent field audits performed by Powertrain Engineering indicate evidence that technicians are not following service procedures contained within program bulletins. Due to the customer implications associated with Owner Notification Program 00M10, technicians are strongly encouraged to follow the service guidelines, as provided in Attachment III. Technicians should pay particular attention to the cooling system flush procedure and to the section related to cylinder bore measurement, cylinder head and cylinder block gasket surface preparation and cleaning.

NOTE:
All repairs identified as related damage MUST be completed and submitted for payment within the Owner Notification Program time limit. Claims for repairs performed beyond the time limit will not be accepted for payment by ACES II.

If a repair was completed within the program limits and the dealer believes a related damage condition was present, but not detected at that time, the dealer must contact the Warranty Action Team (WAT) at 1-800-423-8851 for consideration of a manual pay exception. Exceptions will be considered on a case-by-case basis.

REFUNDS
Owners who paid for repairs made before the date of the Owner Letter may be eligible for a refund for two years from the date of this program or, for a limited time, a special marketing program announced by the Ford and Lincoln Mercury Divisions to assist owners with the purchase of a new Ford or Lincoln Mercury vehicle.

Refer to the Ford or Lincoln Mercury GFB for additional information regarding administration, conditions, terms and limitations of the special marketing program, or contact your Regional Customer Service Manager (CSM).

Owners may be eligible for a refund after the date of the Owner Letter, only if an emergency repair was made away from the servicing dealer.

Attachments

^ Attachment I
^ Administrative Information

^ Attachment II
^ Labor Allowances
^ Parts Ordering Information

^ Attachment III
^ Technical Information

^ Attachment IV
^ Repair Procedure Flowchart
^ Enclosure: Example of Customer Notification Letters

^ Attachment V
^ Recall Newsletter Question and Answer

QUESTIONS?

Claims Information 1-800-423-8851
Other Recall Questions 1-800-325-5621