Ebene Magazine – Ford is spending $ 610 million on airbag recall after losing its appeal

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Ebene Magazine - Ford is spending $ 610 million on airbag recall after losing its appeal

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[DETROIT] After losing an appeal to federal security agencies this week, Ford Motor is now forced to spend $ 610 million to put faulty Takata airbags in 3 million cars and trucks in the US and Canada to replace.

The company is reporting the expense as a special item in its fourth quarter results that does not affect adjusted earnings, as disclosed in a regulatory filing filed Thursday. The recalled vehicles are from the 2006 through 2012 model years and include some of Ford’s bestsellers from that period, such as the Fusion sedan, Edge sport utility vehicle, and Ranger Pickup.

The automaker attempted to recall airbags and claimed the special Takata inflators in its models weren’t as deadly as those linked to more than a dozen deaths in the U.S. because they could propel splinters onto drivers and passengers.

Takata was acquired by the Chinese Ningbo Joyson Electronic Corp. in April 2018. and renamed Joyson Safety Systems.

Read more: What Takata’s Bankruptcy Means for Airbag Recalls: QuickTake Q&A « Remote » Risks In its report filed on Thursday, Ford said its own airbag study found that « the risks identified were so low that they played no role in terms of safety ». The National Highway Traffic Safety Administration rejected Ford’s petition on Jan. 19.

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« We believe our extensive data has shown that a safety recall for these driver airbags was not warranted, » Ford said in a statement Thursday. « However, we respect the NHTSA’s decision and will issue a recall. » Stocks fell 2.3 percent on the postmarket trading news after closing 6.2 percent to $ 11.53 on Thursday – a two-and-a-half year high.

Ford’s shares have risen in the recovered in recent weeks, thanks in part to the company’s involvement in the emerging electric vehicle market, including its stake in EV startup Rivian Automotive Inc. with new models like the electric Mustang Mach-E and the upcoming Bronco SUV that is the automaker ready for a strong 2021.

Analysts expect good news from Ford when it releases its quarterly results on February 4th. « We expect a strong 4Q20 beat for Ford, » wrote Joe Spak, an analyst with RBC Capital Markets, in a January 19 research report.

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Ref: https://www.businesstimes.com.sg

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