The U.S. National Highway Traffic Safety Administration (NHTSA) revealedthat it has recently included 1.3 million into its investigation of Ford Motor Co.’s (F) best selling pickup, F-150, related to a problem with the traps holding fuel tanks that can rust and break. This has brought the total vehicles under the probe to 2.7 million vehicles. The pickup trucks belong to the 1997-2001 model years.
The probe was opened in September last year after receiving 32 consumer complaints by the safety regulators. As many as 1.4 million F-150 pickup trucks were suspected of possibly having the problem.
Last week, NHTSA has detected two cases, in which, the vehicles caught fire as one or both of the steel straps that hold the F-150 fuel tank in place rust and break. The safety regulator stated that 306 consumer complaints exist related to the problem. Out of them, 175 complaints were filed with the NHTSA and 156 with Ford. Some consumers filed with both the automaker and the safety regulator.
Last month, Ford has extended the recall of the same pickup truck to nearly 1.35 million units in the U.S. and Canada due to 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.
Ford was initially recalling only those vehicles that were manufactured between November 1, 2004 and June 30, 2005, i.e., from the 2005-2006 model years. However, in the extended recall, the company decided to recall some vehicles that belong to the 2006 model year.
The extended recall included 89,000 units of F-150 pickups in Canada, 46,000 units in Mexico and 10,000 units in other parts of the world. It also affected 16,000 units of Lincoln Mark LT trucks of model year 2006.
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 February this year, 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. There have been more than nearly 600,000 vehicles recalled throughout 2010.
Ford, a Zacks #3 Rank (Hold) stock, revealed 48% rise in profit to $2.61 billion from $1.76 billion in the same quarter of 2010. On earnings per share basis, profits rose 35% to 62 cents per share from 46 cents per share a year ago, thereby topping the Zacks Consensus Estimate by 12 cents per share.
The rise in sales was attributable to the company’s One Ford plan, which relies on fuel-efficient lineups, continued investment in global assets, efficient management and strengthening of core businesses, which has offset the negative impact from not-so-favorable economic condition as well as earthquake and tsunami in Japan.
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