Ford Motor Co.
) announced that it would recall 539,000 vehicles including Ford
Escape SUVs, and Ford Freestar and Mercury Monterey minivans
because of safety iss ues. Most of the recalled vehicles were sold
in the U.S.
The automaker would recall 286,000 units of Ford Escape SUVs
from the 2001 and 2002 model years due to a problem with the
braking system that could lead to fires. The SUVs have a faulty
brake master cylinder reservoir cap that could leak brake fluid.
The leakage could cause an electrical short in the antilock brake
According to a filing with the National Highway Traffic Safety
Administration (NHTSA), Ford had announced a similar recall in 2007
in order to repair the defective antilock brake system in the
vehicles. However, some vehicles may not have been properly
inspected or repaired causing the latest round of recall.
Ford revealed that the defective antilock braking systems were
manufactured between October 1999 and July 2002 at a factory that
had bee n closed. The automaker stated that parts shortages could
delay the necessary repair in some cases. So far, it has not
received any reports of accidents due to the problem.
The second round of recall involves 253,000 units of Ford
Freestar and Mercury Monterey minivans from the 2004 and 2005 model
years. Ford discontinued the Mercury brand in 2010 and started
focusing on Lincoln.
The automaker detected faulty torque converter in the vehicles
that could cause them to lose ability to move forward and reverse
without warning. The condition would increase the risk of an
Automotive safety recalls were brought into focus by media after
) 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, a string of recalls ha s led Toyota to face numerous
personal injury and wrongful death lawsuits in federal courts. The
Transportation Department of U.S. also imposed a fine of $48.4
million on the company due to late recall of millions of defective
Last month, Ford had recalled 128,616 units of Fusion and
Mercury Milan sedans in order to fix the defective steel wheels in
the vehicles. The automaker had decided to replace lug nuts on all
four wheels and inspect rear-wheel disc brakes surfaces. It may
also replace the disc brakes if necessary for some of the sedans
with model years 2010 and 2011.
Ford, a Zacks #4 Rank (Sell) stock, posted a $66 million or 3.5%
fall in profits to $1.85 billion in the third quarter of the year
from $1.91 billion in the same quarter of prior year. However, on
per share basis, earnings were 46 cents versus 48 cents a year ago,
beating the Zacks Consensus Estimate of 44 cents. The decline in
profits was attributable to a fall in comm odity prices and
anticipated reductions in Financial Services results.
Total revenues in the quarter went up $4.1 billion or 14.1% to
$33.1 billion. This compared with the Zacks Consensus Estimate of
FORD MOTOR CO (
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