Ford (F) To Recall Models For Safety Issues In North America

Ford Motor Company (NYSE:F) is issuing one safety recall and two safety compliance recalls for its Ford Transit van/bus vehicles in North America.

Roughly, 402,462 Ford van/bus vehicles with medium, long and extended wheelbases and chassis cab/cutaways with medium wheelbases are going to be replaced with driveshaft flexible coupling.

Of the total recalls in North America, 370,630 are of U.S., 2,361 are of federalized territories, 3,217 of Mexico and 26,254 of Canada.

The safety recalled vehicles having a cracked flexible coupling may lead to a separation of the driveshaft, which might result in a loss of motive power while driving or during an unintended vehicle movement in park without the parking brake applied. In addition, separation of the driveshaft from the transmission can cause secondary damage to nearby components, including the brake and fuel lines. A driveshaft separation may increase injury or crash risks.

Per field data, the company does not expect the current flexible couplings to worsen that might result in driveline separation in vehicles, which have travelled less than 30,000 miles. For affected vehicles within 30,000 miles or vehicles that have had a driveshaft or driveshaft flexible coupling replaced within the last 30,000 miles, no alteration or interim repair is required until the vehicle or replaced flexible coupling reaches 30,000 miles. After reaching the limit, customers should schedule an appointment with their dealer for interim repair.

For vehicles with over 30,000 miles travelled, the repair will consist of a driveshaft flexible coupling replacement every 30,000 miles until the final repair is available and completed.

The models recalled for safety compliances are four 2017 Ford Police Interceptor Utility vehicles and three 2016 Ford Escape vehicles, both in the U.S.

The Police Interceptor Utility models will have their second row seat attachment studs repaired, which otherwise may not adequately control an occupant in a crash, thus increasing the risk of injury.

The Ford Escape models will be replacing driver knee airbag modules, which if not repaired may not inflate as intended due to lack of inflator gas generant material. Inadequate inflation of airbags may aggravate injury risks to the driver in a crash.

Before this recall, last month, the company had issued two safety compliance recalls in North America itself. One was for the model 2017 Ford F-150, Explorer and Super Duty for inadequate welds in driver-seat back frames, while the other was related to Ford aftermarket chrome exterior door-handle covers. At that time, approximately 2,418 vehicles were recalled. The company has recalled some 2015-17 Ford F-150 and 2017 F-250 to F-550 vehicles equipped with these covers, purchased as an accessory component from a Ford dealer.

Like some of its peers, Ford too has been recalling its vehicles regularly to fix safety issues. These frequent product recalls not only reduce consumers’ confidence in a brand but also add to its expenses.

Price Performance

Ford shares have underperformed the Zacks categorized Auto Manufacturers-Domestic industry in the last three months. The company’s shares have declined 5.1% compared with the industry’s 4% advance.

Zacks Rank & Key Picks

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

Ford Motor Company Price and Consensus

Ford Motor Company Price and Consensus | Ford Motor Company Quote

A few top-ranked companies in the auto space are Cummins Inc. (NYSE:CMI) , Fox Factory Holding Corp. (NYSE:F) and Volkswagen (DE:VOWG_p) AG (OTC:VLKAY) . Cummins sports a Zacks Rank #1 (Strong Buy), while Volkswagen and Fox Factory Holding carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Cummins has an expected long-term growth rate of 11.7%.

Fox Factory Holding has an expected long-term growth rate of 15.6%.

Volkswagen has an expected long-term growth of 17.5%.

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