I'd encourage a bit more skepticism to this article. While this accusation could possibly be true, there are two things to keep in mind, which I am sharing having experience as a founder/CEO who has gone from startup to IPO:<p>1) This is taken from a complaint in a class action lawsuit. Class action lawyers are very similar to patent trolls whereby they can spin almost any story they want. And journalists go for clicks, so they amplify the sensationalism. It doesn't mean this is one of those, but a class action complaint should not just blindly be trusted.<p>2) There is a strong theme of "of course execs lie cheat steal at every turn" and I also think this narrative should be questioned. Ethics aside, the level of compliance in a public company is insanely high. Execs are already rich. To risk jailtime, which fraud can lead to, you'd need to see something more existential than slightly increasing margins on used van sales.<p>I felt inclined to comment as I've been on the other end of articles like this, and it is astounding the level of mind reading people have done into my intent and actions on things that were factually just not true at all. I also truly would find it very difficult to commit a broad organizational fraud even if I wanted to and my company is only 500 people.<p>If I had to make a prediction, the case is less black and white than it appears, and if there was fraud, it was probably committed at a non-executive level by the person whose P&L was directly tied to these resales. Or, it was done independently by the much smaller leasing company where this was more existential to them. It is highly unlikely to be a Fed Ex executive-level conspiracy.<p>I'm sure there are a few counter examples, such as say the VW emissions scandal, but I would counter these were the exceptions that proved the rule and in general when the C-level was involved was much higher stakes.
<i>and then selling them at auction with 100,000</i> ... <i>However, their real mileage was sometimes as much as four times the odometer readout</i><p>These numbers matter <i>more</i> here. The Cummins/Allison engine/drive-train in these vehicles are otherwise good for 1 million miles before rebuild on average until they are used as delivery trucks. The constant stopping and starting used as delivery trucks cuts that number down to around 480k miles. So they are selling vehicles that will require engine and transmission rebuilds in less than 80k miles. That's very shady. The engine rebuilds are usually around $10k <i>same as a refurbished engine</i> and the transmission rebuild is around $3k. That does not count the cost to install them.
When did we move to a "do whatever you think you can get away with" model of society?<p>Maybe I'm naive but I think there used to be at least a modicum of self-restraint on this kind of thing. Sure, people always tried to make as much money as possible, but there used to be <i>some</i> limit <i>somewhere</i> - not because you'll get caught but because c'mon, we just don't do that! That seems to have now been totally lost.
> When he sold the truck, his buyer hooked it up to a computer that told them the real mileage was around 400,000 miles.<p>I’m not knowledgeable about odometers at all, but if it’s as easy as “hooking up to a computer” to get the real mileage, why don’t people do that when they buy the trucks?
I have doubts that we're getting an accurate story here, I know it's trendy to hate big companies but this seems like a really stupid thing to do and something you're likely to get caught doing if you're doing it on every truck.<p>Anyone buying used delivery trucks knows they get driven all day every day until it's uneconomical for the owner to continue operating them. Hundreds of thousands of miles. It would be very unusual to see one for sale with under 200k miles, that's "just getting broken in" for trucks like this.<p>I'm even surprised that these trucks have mechanical odometers. I havent's seen one in a passenger car in many years, they are all digital, rarely fail and (I assume) would be harder to tamper with.
A close reading of the article leaves room to doubt whether FedEx was complicit in the alleged scheme. I’m not surprised to see that FedEx denies the allegations. Given that there is another defendant in the lawsuit I suspect there is more to this story than what’s been presented here.
All I can think is "why would you replace every odometer if you weren't committing fraud?". Like that costs money and time to do. Were they <i>all</i> broken and needed replacing?<p>And if you aren't committing fraud and there's a reasonable reason to do this, why not do it just before sale? Why drive another 100k on them afterwards?<p>It's just so dumb and obvious.
For the how:<p><i>The lawsuit accuses FedEx of replacing the odometers in many of its vans with new ones that read zero miles, using the vans for a bit longer after that</i><p>Being born into a 5 digit odometer world and growing up around people who learned every way possible to suss out mileage - this seems nuts to me. How could they think that zero people would suspect and investigate an odometer swap?<p>Past that, how could so few company mechanics notice a discrepancy between mileage and wear - that no whistleblowers came forward?
Complete shot in the dark, but I bet culpability lies with FedEx's thousands of subcontractors. Their van lease agreements with FedEx obviously benefit them if they return them with fewer miles. Given that a great deal of contractors tiny family businesses, it doesn't surprise me that enough of them tried to eek out more profit for people to start to notice.
Semi-related anecdote regarding this. This won’t happen with UPS delivery vans, as they have them custom made and scrap them at end of life.<p>I assume for trademark purposes, among other things.
There was a brief discussion of this about five days ago, though <i>well below</i> the dupelicate-submission threshold, with only 5 comments:<p><<a href="https://news.ycombinator.com/item?id=36460395">https://news.ycombinator.com/item?id=36460395</a>><p>From Jalopnik: "FedEx Odometer Fraud" <<a href="https://jalopnik.com/fedex-named-in-what-could-be-one-of-the-largest-odomete-1850570768" rel="nofollow noreferrer">https://jalopnik.com/fedex-named-in-what-could-be-one-of-the...</a>>
I find this hard to believe. The claims of both lawsuits are basically the same. The FedEx routes are all independently owned. The route owners are responsible for fixing their vehicles. Parts get replaced constantly. Its a never ending mechanics job to serve these fleet vehicles.
As a public company, FedEx undergoes routine audits. Do accounting firms audit vehicle mileage? I'd assume that vehicle depreciation is is an important part of the balance sheet calculations at Fedex, and that mileage might be audited as part of the depreciation functions.
> Tom Layton of Henderson, Nevada first noticed FedEx's odometer rollbacks in 2017. Layton, who's been buying and selling trucks and vans for 36 years, bought a FedEx Freightliner truck with around 180,000 indicated miles. When he sold the truck, his buyer hooked it up to a computer that told them the real mileage was around 400,000 miles.<p>And yet another reason to ensure "Right to Repair" Laws are passed and enforced.<p>Right now, one state, I forgot which, was informed by the auto industry they will ignore the law. I do not know if enforcement has started yet.
Similar, but much smaller scandal in UK involving BMW and Police.<p>1 BMW N57 Diesel engines like to catch fire if idled for a long time and then flogged (Oil/EGR coolant leak) <a href="https://jalopnik.com/bmws-are-bursting-into-flames-so-they-don-t-have-to-be-1848542518" rel="nofollow noreferrer">https://jalopnik.com/bmws-are-bursting-into-flames-so-they-d...</a> <a href="https://www.dailymail.co.uk/news/article-11637379/Widow-PC-killed-horror-crash-praises-BMWs-decision-stop-selling-cars-UK-police-forces.html" rel="nofollow noreferrer">https://www.dailymail.co.uk/news/article-11637379/Widow-PC-k...</a><p>2 Police are exempt from MOD so their cars dont have documented service/odometer history.<p>3 Tons of dealers bought decommissioned Police BMWs and rolled odometers.<p>The Clocked Up Holy Engine Scandal of the UK Police BMW Fleet by Geoff Buys Cars <a href="https://www.youtube.com/watch?v=YEryJeBcg-8">https://www.youtube.com/watch?v=YEryJeBcg-8</a><p>No more BMW Police Cars in the UK... thanks to N57 Engine Fires by Geoff Buys Cars <a href="https://www.youtube.com/watch?v=_gJFDdnMXKg">https://www.youtube.com/watch?v=_gJFDdnMXKg</a>
I remember hearing a story of a car rental doing this on a systematic scale. When they were caught, they acknowledged a "mistake" and offered to reimburse difference in price.<p>However, they were caught fiddling the mileage again on the 'reimbursed' cars (not upping it enough). They were caught for the second time because the catalytic converter had a chip that counted every 250 miles or something along those lines.
Doesn't surprise me, they didn't give me a cost of living increase for over a decade and new hires were making almost as much as I was when I quit after 15 and a half years (office job), along with about half the office quitting within a year.
Maybe it has something to do with talking a package from Southern California, to Florida, to Texas, delay shipping twice, and then back to Northern California. If I need the item and I see FedEx as the shipping agent, I go look elsewhere.
"It isn't illegal to replace odometers and it isn't even illegal to sell vehicles with odometers that have inaccurate mileage readouts. However, to do so, a disclaimer needs to be made by the seller, indicating to the buyer that its mileage readout is inaccurate and that the odometer was replaced."<p>How is it even legal? "You can lie but you have to admit to it".