NHTSA Investigates Ford for CO Exposure - Analyst Blog

The National Highway Traffic Safety Administration (NHTSA) is investigating consumer reports that indicate that exhaust fumes sometimes enter the passenger cabin of Ford Motor Co.'s F Explorer of model years 2011 to 2014. These fumes include carbon monoxide CO and may cause strange odor in the vehicle.

Moreover, prolonged exposure to carbon monoxide levels over 70 parts per million may be harm the occupants. According to a lawsuit filed by an Explorer owner earlier this month, the carbon monoxide level reached 100 parts per million when the auxiliary rear air-conditioning was turned on and the engine was functioning at higher revolutions. This level of carbon monoxide is possibly lethal to the occupants, per the lawsuit, which was filed by a Florida-based Explorer owner on behalf of a proposed class of owners of Ford Explorers of model years 2011–2013.

Ford is also reviewing the matter, for which it has received numerous customer complaints. In fact, the company had issued a technical service bulletin to dealers in Dec 2012, detailing three ways to tackle the problem. Technical service bulletins are issued to handle consumer complaints, just like recalls are made to address safety issues.

However, the lawsuit accuses Ford of failing to warn consumers about possible carbon monoxide exposure. If the NHTSA finds this to be a safety issue, Ford will be forced to recall these vehicles. The automaker might also be subjected to a fine.

Automobile safety issues have been garnering significant media coverage this year, mainly due to the late recall of millions of General Motors Co. GM vehicles with faulty ignition switches. Earlier this year, the automaker agreed to pay a fine of $35 million to the U.S. safety regulators for the late recall.

Ford currently carries a Zacks Rank #3 (Hold). Some better-ranked automobile stocks worth considering include Fox Factory Holding Corp FOXF and Tower International, Inc. TOWR. Both these stocks sport a Zacks Rank #1 (Strong Buy).