Ford Recalls F-150 Trucks Due To Parking Brake Issue
Ford (NYSE: F) announced on Friday a safety recall affecting 870,000 F-150 trucks in the United States. The recall is in response to a potential wiring issue that could lead to an unexpected activation of the electric parking brake. The concern arises from the contact between the wiring harness and the rear axle housing, which may occur in F-150 trucks from the 2021 through 2023 model years equipped with a single exhaust system.
The automaker reported the matter to the National Highway Traffic Safety Administration (NHTSA), outlining the scope of the recall and the affected truck models. As of now, Ford has received 918 warranty claims and three field reports regarding the wire chafing condition in North America. Among these reports, 299 cases indicated that the electric parking brake had activated unintentionally, with 19 of them occurring while driving.
Despite these incidents, Ford reassured the public that they are not aware of any crashes or injuries associated with the recall issue. Nonetheless, as a precautionary measure, Ford will be taking corrective action to address the problem. Authorized dealers will install a protective tie strap, apply tape wrap, and replace the harness as necessary to prevent any potential hazards.
Ford urges all owners of the affected F-150 trucks to bring their vehicles to authorized service centers promptly to ensure their safety and the continued proper functioning of the electric parking brake system.
The news comes after Ford reported its second-quarter results, recording revenue of $45 billion, a 12% increase compared to the same period last year. The revenue surge was primarily driven by strong sales of gas-powered trucks, such as the new Ranger, SUVs, and commercial vans. However, their electric vehicle (EV) business is facing significant hurdles, with an expected loss of $4.5 billion in 2023.
Despite the uncertain economic environment and inflationary pressures, Ford has raised its full-year guidance for 2023 to an adjusted earnings range of $11 billion to $12 billion. Additionally, the company expects adjusted free cash flow between $6.5 billion and $7 billion, showing optimism in their financial outlook. Ford attributed this optimistic guidance to improvements in their supply chain, higher industry volumes, favorable results from the all-new Super Duty, and reduced commodity costs.
Ford’s CEO, Jim Farley, has emphasized the significance of 2023 as a pivotal year for the company, following a reorganization that separated the company into three business units: Ford Blue for gas and hybrid vehicles, Ford Model e for connected EVs, and Ford Pro for commercial products. Despite the challenges in the EV segment, Farley remains confident that Ford’s strategic moves will position them as early leaders in the EV market.
In the second quarter, Ford’s EV segment reported revenue of $1.8 billion, a considerable 39% increase from the same period last year. However, it also incurred an adjusted earnings loss of $1.08 billion, surpassing analyst expectations. The company’s decision to pause production at the Mexico factory assembling the Ford Mustang Mach e contributed to a 2.8% drop in EV sales during the second quarter.
Despite these setbacks, Ford remains steadfast in its commitment to the EV segment. It aims to achieve a 600,000 run rate by 2024 (a year later than initially forecasted) and ultimately reach a 2 million run rate. Ford has not abandoned its goal to achieve an 8% margin run rate for the EV business by the end of 2026.
Ford’s commercial business segment, Ford Pro, has seen exceptional growth, reporting a 22% increase in revenue to $15.6 billion in the second quarter. This surge in revenue is not solely due to truck sales but also from the revenue generated by their services and software offerings. Ford Pro has over 80% of the company’s nearly 550,000 paid subscribers utilizing their solutions for fleet management, telematics, and EV charging.
Information for this story was found via TechCrunch, Reuters, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
