Ford to spend $610 million to recall 3 million vehicles

by Buzz Street Times

A visitor walks past a Ford Escape Titanium at an auto show last April.

Greg Baker | AFP | Getty Images

DETROIT – Ford Motor will recall 3 million older vehicles due to potential issues with their airbag inflators, costing the automaker an estimated $610 million.

The company confirmed the cost in a filing Thursday with the Securities and Exchange Commission after the closing bell. Ford stock fell into the red during after-hours trading, down about 2%. The shares ended Thursday up 6.2% at $11.53 a share — the stock’s highest close since June 2018. Ford’s market cap is more than $45 billion.

In the filing, Ford said the expense will be treated as a special item as part of its fourth-quarter earnings on Feb. 4. That means it will not impact Ford’s adjusted earnings before interest and taxes or adjusted earnings per share – closely watched items by Wall Street.

The National Highway Traffic Safety Administration on Tuesday denied a 2017 petition by Ford seeking to avoid recalling the vehicles with the potentially dangerous airbags, which were produced by auto supplier Takata.

The impacted vehicles range from model years 2006 through 2012. They include Ford Ranger (2007-2011), Fusion (2006-2012), Edge (2007-2010), Lincoln MKZ/Zephyr (2006-2012), MKX (2007-2010), and Mercury Milan (2006-2011) vehicles.

The recall will affect approximately 2.7 million vehicles in U.S. and approximately 300,000 in Canada and other locations, the company said.

Takata airbag inflators have been an ongoing issue for automakers for years. The defect can cause air bag inflators to rupture, sending potentially deadly metal fragments flying in the vehicle. The problem has been linked to the deaths of at least 27 people worldwide and 18 in the U.S., according to Reuters. The problem involving the more than 67 million inflators is the largest automotive recall in U.S. history

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