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Ford Recalls Over 800,000 Cars; Don't Fret, Investors

Ford Recalls Over 800,000 Cars; Don't Fret, Investors
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Ford Motor Company (NYSE: F) has issued a safety recall this morning on roughly 830,000 vehicles manufactured between 2013 and 2015 of different models, including the Escape, Focus, Mustang, Lincoln MKC, C-MAX and Transit Connect.

This is not the first time that the second biggest American automaker is recalling its vehicles. Over the last year, the company has issued a dozen or so such recalls. However, the recalls appear to have no impact on the stock price Thursday, just as previous recalls caused little effect.

Regarding the current recall, Ford indicated that the pawl spring tab in the side door latch could break. The company stated that this condition could prevent the door from latching, while in some cases, the door might unlatch while driving, clearly increasing injury risks.

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The company has advised dealers to replace side door latches without any cost to the customer. Aside from that, the automaker indicated a corresponding customer satisfaction program for vehicles outside the scope of this recall. That means the company would offer a one-time replacement without any charges if a vehicle exhibited a broken door latch.

So far, the company has identified one reported accident and one reported injury that might have been associated with this issue.

Ford Recalls In Review

Below is a timeline of Ford recalls over the last one-year period:

  • August 18, 2015: Issued safety compliance recall for 26,400 vehicles.
  • September 30, 2015: Issued five Safety Recalls and One Safety compliance recall in North America involving about 340,000 vehicles.
  • October 28, 2015: Issued two safety and one safety compliance recall involving 129,000 vehicles.
  • November 23, 2015: Issued two safety recalls involving 450,000 vehicles.
  • December 22, 2015: Issued three safety recalls and one safety compliance recall involving 313,000 vehicles.
  • January 27, 2016: Issued safety recalls for 83 vehicles.
  • February 24, 2016: Issued two safety recalls involving 51,500 vehicles.
  • March 31, 2016: Issued three safety recalls involving 36,000 vehicles.
  • May 25, 2016: Issued one safety and compliance recall involving about 271,000 vehicles.
  • April 27, 2016: Issued three safety recalls and two compliance recalls involving about 202,000 vehicles.
  • June 1, 2016: Issued one safety recall involving 1.9 million vehicles.
  • June 29, 2016: Issued three recalls involving over 8,200 vehicles.
  • August 4, 2016: Issued one safety recall involving 830,000 vehicles.

Interestingly, a report in indicated that about 45 million vehicles recalled in the United States between the years 2013 and 2014 were not fixed. Between January 1, 2013, and December 31, 2015, approximately 109 million vehicles were recalled in the United States.

This suggests that the recall of vehicles by different automakers is nothing new to Americans. Therefore, investors do not react to the recalls unless and until the company discloses the amount of damages that it would have to bear, which would impact its results.

At time of writing, Ford shares traded flat on the day.

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