Should Ford’s Recent Recall Concern Investors?

Ford_FreestarThe salt that is sprinkled on roadways during to the winter to melt ice and snow in 20 cold-weather states and Canada caused rust to accumulate in wheel wells of approximately 230,000 Ford (NYSE:F) Freestar and Mercury Monterey minivans sold between 2004 and 2007. The resulting rust buildup prompted the third-row seats to come loose and Ford was forced to issue a recall in March after U.S. auto safety regulators received 80 complaints.

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Still, the National Highway Traffic Safety Administration is monitoring about 100,000 of the minivans that were not covered by the earlier recall. The agency said Tuesday in documents posted to its website that it would be watching vans driving outside the salt-belt areas. But the agency did note that the rust buildup seldom occurs if the minivans are not exposed to salt. In fact, NHTSA said it was aware of only one rust complaint from a minivan owner outside the recall area.

In the documents, NHTSA said it will monitor the vans outside the recall region, but its investigation into the problem has officially ended since the automaker has repaired some of the vehicles in question. The agency said it was satisfied with Ford’s recall decision

While no crashes or injuries have resulted from the rust buildup, according to Ford, the company has said that rust can weaken the mounting brackets that hold the removable seats to the floor of the van. Any vehicle owners that were not covered by the recall can contact Ford for repairs if the minivan shows signs of rust in the wheel wells, the agency said.

The NHTSA will also be closing its investigation into 114,998 Jeep Patriot SUVs manufactured between 2011 and 2012 after Chrysler Group recalled about 20,000 2012 Patriot and Compass vehicles in April. The recall was issued due to 64 reports for engine stalls with a delayed restart or none at all. The Auburn Hills automaker said that the reason for the problem was vehicles with side saddle fuel tanks at times experienced a low siphon rate because of malformed tubes.

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As far as recalls go, Ford’s recall of its Freestar and Mercury Monterey minivans was relatively minor. In recent years, it has been Toyota (NYSE:TM) that has been saddled with problem after problem after problem. In 2010, the Japanese automaker issued a series of recalls that covered 5.6 million vehicles in the United States due to sudden acceleration issues. In August 2010, it recalled 1.3 million Corolla and Matrix cars in the U.S. The manufacturer recalled 1.66 million in October 2010 for problems related to brakes and fuel pumps; 1.7 million vehicles were recalled in January 2011; 7.4 million vehicles were recalled worldwide because of malfunctioning power window switch, which is a potential fire hazard, in October 2012; 2.77 million vehicles, including the Prius hybrid, were recalled in November of 2012; and, Toyota recalled 1.3 million cars globally for two defects in January 2013. These issues left the automaker with quite an image problem, one that has helped U.S. automakers, especially Ford, rise back to prominence and narrow the perceived quality gap.

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