Ford (F) Announces Triple Recall In North America

Share price of Ford Motor Co. (NYSE:F) increased 0.2% on Jun 30 to $12.57 due to overall improvement in the market. However the automaker announced one safety recall and two safety compliance recalls in North America. The vehicles covered under the safety recall include 949 Ford Focus Electric vehicles of model year 2015−2016. The automaker is recalling these vehicles to install a new transmission differential assembly. Of the total vehicles being recalled, 865 are from the U.S. and 66 are from Canada. The affected vehicles include certain Ford Focus Electric vehicles which were manufactured at the Michigan Assembly Plant between Aug 20, 2015 and Apr 13, 2016, or the Saarlouis Assembly Plant, between Feb 28, 2016 and Mar 30, 2016.

Ford is recalling the vehicles as it believes that in some of these, the differential pinion shaft may wear out. This will lead to a shaft fracture which would make the vehicle lose motive power without any prior warning, thereby increasing the risk of injury or a crash.

However, the company has not received reports about any casualty related to the issue. Ford confirmed that the dealers will install a new transmission differential assembly equipped with a friction-reducing coating on both the pinion shaft and pinion gear bores to fix the problem.

In addition to the safety recall, Ford announced two safety compliance recalls. In the first instance, the automaker will recall 2016 Ford F-150 and Ford Explorer vehicles due to inadequate driver seat back weld. Ford will recall around 6,661 vehicles, of which 5,280 are from the U.S and federalized territories, 1,199 from Canada and 132 from Mexico. The affected vehicles include 2016 Ford F-150 vehicles which were produced at the Dearborn Assembly Plant between Feb 20, 2016 and Feb 25, 2016, or the Kansas City Assembly Plant between Feb 17, 2016 and Feb 24, 2016. The recall also covers 2016 Ford Explorer vehicles manufactured at the Chicago Assembly Plant from Feb 17, 2016 to Mar 7, 2016.

Ford stated that the driver seat back of these vehicles may be improperly welded and thus, will not be able to hold an occupant in case of a crash. This therefore increases the risk of injury. However, the automaker is not aware of any casualties related to the issue. Ford will examine the driver seat backrest frame and replace it if required.

In the next case, Ford will recall 608 2016 Ford Transit Connect vehicles to replace the brake hydraulic control unit. Of these, 605 will be recalled from the U.S. and federalized territories, and 3 from Canada. These include 2016 Ford Transit Connect vehicles produced at the Valencia Assembly Plant during Feb 22, 2016 through Apr 9, 2016.

The pump performance of the brake hydraulic control unit is comparatively low. This may decrease electronic stability control and related systems including roll stability control, anti-lock braking system, emergency brake assist, curve control, trailer sway control, traction control and hill start assist performance without any warning. Thus, the risk of a crash increases.

However, the company has not received reports of any accidents related to this issue. Dealers will replace the brake hydraulic control unit of the affected vehicles free of cost.

Ford currently carries a Zacks Rank #3 (Hold).

Some better-ranked automobile stocks include Commercial Vehicle Group Inc. (NASDAQ:CVGI) , Unique Fabricating, Inc. (NYSE:F) and Spartan Motors Inc. (NASDAQ:SPAR) , all sporting a Zacks Rank #1 (Strong Buy).