Flurry Of Recalls Leaves Ford Stock Reeling

A flurry of recalls and slowing sales sent Ford (F) stock tumbling over the last three weeks. The stock reached a one-month high of 12.7 on March 16 before plunging to 11.4 on Monday.

Just one day before the stock reached its peak, news broke that the automaker was recalling approximately 6,000 2017 Ford Mustangs for faulty springs in driver-side doors. Affected vehicles have build dates between January 13, 2017, and January 31, 2017.

Improperly installed springs in driver-side door handles may cause the door to become unlatched in a side-impact collision.

Ford has received no reports of accidents related to its Mustang recall.

On April 1, the company announced that it was recalling 52,000 F-250 trucks over a faulty park rod actuating plate, which may cause vehicles to roll while in the park. The company advised drivers to use the manual handbrake when parking.

Ford also recalled 360,000 vehicles in North America and Europe over a coolant circulation issue that may cause engines to overheat and catch fire.

The vehicles impacted in North America include the 2014 and 2015 compact Fiesta ST, 2014 Escape, 2013 and 2014 Fusion and 2013-2015 Transit Connect. In Europe, affected vehicles include the 2013-2015 Transit Connect van, and the 2010-2015 Focus and C-Max hybrid.

Ford has received 29 reports of fires in Canada and the United States, but there have been no reports of injuries.

Ford's stock and reputation has been reeling since the company began struggling with door latch issues three years ago. Since then, the company has recalled over three million vehicles.

Last fall, over 2.3 million vehicles were recalled due to faulty door latches. That recalls included 2013-2015 C-Max and Ford Escape, and the 2012-2015 Ford Focus.

In 2014, the company recalled 692,700 Escapes from the years 2013 and 2014 for the same issue.

Along with the Ford Mustang recall, the company is also recalling 211,000 new vehicles as part of its faulty door latch saga. The latest recall includes the 2013-2014 Fusion, and the 2014 Fiesta and Lincoln MKZ.

In this series of recalls, a pawl in the latch can break off that causes doors to either open while the car is in motion or stops the doors from closing.

In 2016, recalls related to faulty door latches cost the company $640 million.

The cost of the most recent recall is included in the company's most recent earnings guidance, according to its filing with the Securities and Exchange Commission.

Weaker-than-expected sales for March added fuel to the fire, hurting Ford's stock even more.

The automaker sold 236,250 vehicles n March, marking a 7.2% decline from the same period the previous year. Analysts were expecting sales to decline by 5.9%.

SUVs and trucks were a bright spot for the company. Ford sold 81,330 F-Series pickups in March, up 10% from last year.

Shares of rival GM (GM) are also lower, falling 3.25% to $34.21 on weaker-than-expected sales. Sales for GM increased by 1.6% year-over-year, but the company failed to hit analyst estimates of a 7% gain. 

Disclosure: Jacob Maslow does not own any shares in the companies mentioned in this article.

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