Ford Motor Co. (F) announced that it will recall 144,000 units of its best selling pickup truck, F-150, in the U.S. and Canada. The announcement follows a request made by the National Highway Traffic Safety Administration (NHTSA) to fix a glitch with the front air bags that may deploy when not needed due to a short circuit.
In 2009, NHTSA opened an investigation into 1.3 million units of F-150 trucks from the 2004-2006 model years. The vehicles were manufactured at the company’s Norfolk Assembly Plant in Virginia. However, Ford is recalling only those vehicles that were manufactured between November 1, 2004 and June 30, 2005, i.e., from the 2005-2006 model years.
In November last year, NHTSA revealed that it had received reports of 98 injuries due to unintentional air-bag deployments. Most of the accidents occurred when the trucks were started.
Ford stated that it would notify owners of the vehicles covered by the recall in early March. The automaker might replace the defective airbag wire in the steering wheel at no charge that would take less than half a day at Ford dealerships.
Automotive safety recalls were brought into focus by media after Toyota Motors’ (TM) announcement of the largest-ever global recall of 11 million vehicles since September 2009. The Japanese automaker’s recall was related to problems such as faulty accelerator gas pedals and slipping floor mats as well as defective braking systems.
The string of recalls has led Toyota to face numerous personal injury and wrongful death lawsuits in federal courts. The Transportation Department of U.S. has imposed $32.4 million in fines on Toyota related to two separate investigations due to late recall of millions of defective vehicles on top of the highest-ever fine of $16.4 million paid earlier in 2010 related to the same issue.
At the beginning of this month, Ford also recalled about 363,000 units of F-150 pickup trucks due to a defect with their interior door handles. In 2011 till date, the automaker has recalled more than 1 million vehicles, including 507,000 units of F-150 pickups and 525,000 units of its Windstar minivans due to a corrosion related problem. There have been more than nearly 600,000 vehicles recalled throughout 2010.
Ford, a Zacks #3 Rank (Hold) stock, posted a 24% fall in profit to $1.2 billion or 30 cents per share (before special items) in the fourth quarter of 2010 from $1.58 billion or 43 cents per share (before special items) in the same quarter of 2009. With this, the automaker has missed the Zacks Consensus Estimate by 19 cents per share.
The decline in profit was attributable to lower year-over-year revenues generated by the company’s automotive operations as well as the financial arm. Total revenue during the quarter ebbed 7% to $32.5 billion. However, excluding revenues from Volvo, sales improved by $1.6 billion or 5% from the fourth quarter of 2009.
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