1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Quantum Research
Quantum Research
Articles (28) 

Ford Motor Joins the Recall Bandwagon

June 08, 2014 | About:

The U.S. automaker Ford Motor (NYSE:F) issued safety recalls on Thursday for nearly 1.4 million cars in North America, mostly in the U.S. to fix potential steering and other problems. Ford said that it was recalling 9,15,200 Ford Escape and Mercury Mariner from model years 2008 through 2011, and 1,96,000 Ford Explorer from 2011 through 2013 because a torque sensor within the steering column may malfunction, resulting in loss of electric power steering assistance.

The Issue in Details
In that case, the steering system defaults to the manual steering mode, making vehicles more difficult to steer, especially at lower speed, which would increase the risk of crash. Not all vehicles have the same issue and the fix involves either replacing a pert or software update.

About 7,36,400 models of Ford Escape and Mariners were recalled in the U.S., 1,34,500 in Canada and 39,800 in Mexico. The Detroit automaker made a second recall of Ford Explorer sports utility vehicle that could have a problem with the intermittent electrical connection in the steering gear. This could result in the loss of electric power steering while driving. In such a case however, the drivers will be alerted by a chime and a message in the instrument cluster. Ford, the number two U.S. automaker, feels that both the recalls could affect additional vehicles in the other markets.

The company also issued a recall of about 1,96,600 Taurus vehicles, model years 2010 – 2014, to replace a license plate lamp that could become corroded in a high corrosion environment linked to road salt use. The lamp could short circuit and cause fire. It believes 18 fire problems are connected to the issue. In one such case, the driver tried putting out the fire using hands and was injured. Ford said that the fix would replace the part altogether. The recall applies to vehicles in 20 states and the District of Columbia where road salt is used to treat the roads in winter storms.

The fourth recall involves floor mats that can be improperly installed and come in contact with the accelerator pedal. It includes about 82,500 mats related to the 2006 to 2011 models of Ford Fusion, Mercury Milan , Lincoln Zephyr and MKZ. Two accidents are allegedly connected to the problem, the company said.

Earlier this month, the American carmaker included 692,500 Escapes from model years 2013 and 2014 as a part of the recall for problem with side airbags and door handles.

The Recall Problem – A Recurring Issue
Automakers have come under scrutiny since General Motors (NYSE:GM) announced a safety issue it had not publicly disclosed for 10 years. The ignition switch issue has been connected to at least 13 deaths, and finally this year the largest U.S. auto player has recalled as many as 16 million vehicles. Ford’s total for the year is 11 separate recall notices, affecting a total of 2.8 million vehicles.

To date, 2014 has been a big year for automobile recalls, which in the first five months of the year has already surpassed all of 2013. Last year 22 million car safety recalls were issued. This year the number is already more than 24 millions, on a pace to catch the all time set record in 2004, of 30 million recalls.

Parting Words
The recalls is being closely watched by the Congress, the Justice Department and the National Highway Traffic Safety Administration. The recall depicts Ford’s heightened sense of concern because of its reputation in other markets might be at stake too. This could affect the company’s sales of vehicles in the year ahead. But it’s good to accept technical glitches and fix them at the earliest, exactly what the Blue Oval has tried to do.

Rating: 0.0/5 (0 votes)


Please leave your comment:

Performances of the stocks mentioned by Quantum Research

User Generated Screeners

Doug Taylor<3 pe
nec5555Pat Dorsey Moat 5Y v1
nec5555Pat Dorsey Moat 5Y
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat