Ford Motor Co. (F) has recalled 1.1 million units of its popular F-150, F-250 and Lincoln Blackwood pickup trucks due to a problem with their gas tanks that could catch fire. The recall includes models manufactured between 1997 and 2004.
This is not the first time Ford has recalled its F series pickups. A probe was initiated in September last year after receiving 32 consumer complaints by the U.S. National Highway Traffic Safety Administration (NHTSA). As many as 1.4 million units of F-150 pickup trucks were suspected of possibly having the same problem with the traps holding fuel tanks that can rust and break.
Since the inception of the probe, Ford has been recalling the pickups in several installments. In April, the automaker has extended the recall to 1.35 million units in the U.S. and Canada due to the pressure from the safety regulators.
In May, NHTSA included another 1.3 million units into its investigation. Those pickup trucks belonged to the 1997-2001 model years.
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.
Ford posted a profit of $2.64 billion or 65 cents per share in the second quarter of the year, a $67 million or 2.5% decline from $2.70 billion or 68 cents per share in the corresponding quarter of 2010. However, the company’s profits were higher than the Zacks Consensus Estimate of 60 cents per share.
The decline in profit resulted from an anticipated slump in Financial Services results. The automaker has already cautioned its investors in the near past about the non-recurrence of lower lease depreciation expense and lower credit loss reserve reductions in 2011 compared with 2010. It revealed that these two items are expected to reduce the company’s profit by $1.1 billion in 2011 on a year-over-year basis.
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