Ford Recalls for Fuel Tank Leak - Analyst Blog
03 April 2013 - 11:40PM
Zacks
Ford Motor Co. (F) revealed that it would
recall 3,500 units of 2012 Ford Taurus and the 2012 Lincoln MKS
sedans as well as the 2013 Ford Explorer sport utility vehicle
(SUV) in order to fix their fuel tanks that can leak after a crash.
More than 3,000 units of the vehicles will be recalled in the
U.S.
Ford manufactured the recalled vehicles at its Chicago assembly
plant. The company built Taurus and MKS models between Jul 2011 and
Jan 2012 and the Explorer SUV in Mar 2012.
It has been found that the fuel tanks in the vehicles are equipped
with an improperly molded seam. So far, Ford received six reports
of tanks with a fuel odor or leak due to the problem. However, the
automaker is not aware of any accidents or injuries associated with
it.
Automotive safety recalls were brought into focus by media after
Toyota Motors’ (TM) announcement of the
largest-ever global recall of 3.8 million vehicles in September
2009, triggered by a high-speed crash that killed 4 members of a
family.
Later on, a string of recalls has led Toyota to face numerous
personal injury and wrongful death lawsuits in federal courts. Last
year, the Transportation Department of U.S. slapped a fine of
$17.35 million on Toyota due to late response regarding a defect in
its vehicles to safety regulators as well as late recall of those
vehicles.
According to the department, it was the maximum allowable fine
under the law for not initiating a recall in a timely manner. The
latest fine adds to $48.4 million imposed by the U.S. government on
the company in 2010 due to a late recall of millions of defective
vehicles.
Last month, Ford announced plans to recall 7,150 vehicles
manufactured in November last year due to a problem with the child
lock on the left rear door. About 5,650 vehicles will be recalled
in the U.S. The recall involved redesigned 2013 Ford Escape
crossover, which has been recalled multiple times last year.
Recently, General Motors Company (GM) also
announced plans to recall 33,700 units of Buick LaCrosse sedans and
Cadillac SRX crossover vehicles globally from the 2013 model year
in order to fix a software glitch that could lead to a crash.
General Motors will recall 26,582 vehicles in the U.S. and the
remaining vehicles in Canada, Mexico, the Middle East and
China.
Ford, a Zacks Rank #3 (Hold) stock, posted a robust 55.0% rise in
earnings per share to 31 cents in the fourth quarter of 2012 from
20 cents in the same quarter of 2011 (all excluding special items).
With this, the company has beaten the Zacks Consensus Estimate of
26 cents.
Ford’s fourth-quarter pre-tax profit of $1.7 billion was the
highest in a decade. Meanwhile, net profit surged 55.7% to $1.2
billion from $797 million a year ago. Thanks to the impressive
North American results and, to some extent, solid improvements in
Asia Pacific Africa operations.
While we remain on the sidelines about Ford, stocks from the same
industry that warrant a look include Visteon Corp.
(VC) with a Zacks Rank #1 (Strong Buy).
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
VISTEON CORP (VC): Free Stock Analysis Report
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