Ford Recalls Minivans for Corrosion
Ford Motor Co. (F) revealed that it would recall 230,000 units of few minivans lineups due to a corrosion problem that is preventing the fold-down third-row seats from locking in place.
The automaker would recall 196,500 units of Ford Freestar and Mercury Monterey minivans from 2004 through 2007 model years in the U.S. and the remaining 33,500 units in other countries, mainly Canada. The recall would take place in Conn, Del, Ill, Ind, Iowa, Maine, Md, Mass, Mich, Minn, Mo, N.H., N.J., N.Y., Ohio, Pa, R.I., Vt., W. Va and Wis.
Ford has not yet received any reports of accidents or injuries related to the problem. Its dealers would install a new third-row seat mounting bracket and move the latches away from the potentially corroded area as well as install overlay panels in the wheel wells to fix the problem.
A few months back, Ford announced plans to recall 89,153 vehicles in the U.S. and Canada that include 73,320 units of its redesigned Escape SUVs due to overheating problem. The remaining 15,833 vehicles to be covered under the recall included Fusion midsize sedans due to the same problem.
The recall involved only 2013 SE and SEL models vehicles that are equipped with 1.6-liter turbocharged engines. The automaker had revealed that engines in the vehicles can overheat causing leakage of some fluids leading to fire.
Automotive safety recalls were brought into focus by media after Toyota Motors’ (TM) announcement of the largest-ever global recall of 3.8 million vehicles in September 2009, triggered by a high-speed crash that killed 4 members of a family.
Later on, a string of recalls has led Toyota to face numerous personal injury and wrongful death lawsuits in federal courts. Last year, the Transportation Department of U.S. slapped a fine of $17.35 million on Toyota due to late response regarding a defect in its vehicles to safety regulators as well as late recall of those vehicles.
According to the department, it was the maximum allowable fine under the law for not initiating a recall in a timely manner. The latest fine adds to $48.4 million imposed by the U.S. government on the company in 2010 due to late recall of millions of defective vehicles.
Ford, a Zacks Rank #4 (Sell) stock, posted a robust 55.0% rise in earnings per share to 31 cents in the fourth quarter of 2012 from 20 cents in the same quarter of 2011 (all excluding special items). With this, the company has beaten the Zacks Consensus Estimate of 26 cents
Ford’s fourth-quarter pre-tax profit of $1.7 billion was the highest in a decade. Meanwhile, net profit surged 55.7% to $1.2 billion from $797 million a year ago. Thanks to the impressive North American results and, to some extent, solid improvements in Asia Pacific Africa operations.
Few stocks that are performing well in the industry where Ford operates include Oshkosh Corporation (OSK) and STRATTEC Security Corporation (STRT). Both carry a Zacks Rank #1 (Strong Buy).
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