Is Ford in Trouble with Police Cars?

The Ford (NYSE:F) Crown Victoria is the ubiquitous American police car. For fifteen years until 2011, Ford sold 50,000 of them a year to the government and claimed 70 percent of the police car market. Now, this week the government launched a probe into nearly 200,000 of the vehicles because of complaints about defective steering columns.

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The investigation is targeting cars made for the 2005 through 2008 model years. Three official complaints have been registered about the steering column separating while at low speed. No deaths or injuries related to the defect have been reported so far, but police departments across the country are inspecting their fleets and finding a number of at-risk vehicles. Susan Krusel, a spokeswoman for Ford, has said that the investigation only affects police versions of the car, and that the company is cooperating.

In addition to this, Ford is recalling about 5,500 of its 2012 Edge SUV vehicles because of concerns that a part in the fuel line could crack. Again, no accidents or injuries have been reported, but a fuel leak could cause a fire under the hood.

General Motors (NYSE:GM) has also faced a number of recalls recently. Issues including a nearly 250,000 unit recall of Chevrolet Trailblazers have prevented the company from growing its stock, despite recent positive performance. The United States Treasury, which holds a 26.5 percent stake in GM, has declined an offer to sell shares at the current low price. GM shares would need to hit $53 before the Treasury would break even.

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