There is a report that Ford decided on Feb 25/00 to extend the warranty claims on headgasket failures for the 3.8L to 7 years and 160,000 Km (100,000Mi.) for many instances. This has been verified as being true. There is still a number of concerns as outlined by Phil Edmonston below.

Hi Jim.
It's true. My Ford whistleblowers told me about the Friday conference aweek earlier.
I AM NOT ENTHUSIASTIC. JIM.
Ford VPs called me yesterday (Friday) in response to my earlier emailed letter to Ford Canada President Bobbie Gaunt, Clay Ford, and US CEO Jac Nasser and asked for my reaction.
I told them it was a good first start, but the proof is in the details. I intend to still start organizing if they don't take care of other engine and transmission complaints, noted in the above letter and mandate a team of people to handle just those complaints.
They said they'll get back to me in 10 days with additional proposals
and news of what they did for the several hundred complaints I referred
to them .... I relented and said I can wait.
Incidentally that will coincide nicely with my cross-Canada tour where I will communicate good or bad news to public.

Best,

Phil

Mar. 21,2001.

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I can understand his concerns. If this is just an extension of the old program, the flaws will remain that can possibly result in secondary failures of the engines from Main Bearings becoming dried from contact with glycol. Also in not having the heads decked (to insure correct fit) could possibly result in the headgaskets giving out prematurely again. You may wish to view the headgasket section on my comparison page. If you need this repair, be sure to ask WHY they are and are not doing various procedures especially if your oil appears milky & frothy!! Be sure to document their answers for possible future reference and make it known you are doing this! It certainly won't hurt your position and could possibly get you better service.

A news story from KRON tv and SFGate here.

Below is the actual letter I received from Ford.              

In conclusion, it seems that for the time being Ford is doing the right thing. Many people have had their claims paid, including my claim. If you build a product, you should stand behind that product and support it. Hopefully, Ford will continue to do this in future.