Please ensure Javascript is enabled for purposes of website accessibility

Will More Recalls of the Escape Hurt Ford's Stock?

By John Rosevear - Dec 10, 2013 at 4:59PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Ford has now issued seven different recalls on the new Escape. Is it time for Ford shareholders to worry?

The Ford Escape was an all-new model last year. Sales are up 14% this year through October. Photo credit: Ford Motor Co.

Ford (F 3.89%) recently announced two new recalls  for its 2013 Escape. The new recalls cover almost 140,000 Escapes sold in the U.S., and the defects in question are pretty serious: 13 vehicle fires have been reported, though nobody has been injured.

Every automaker has recalls, and as long as nobody has been injured as a result of the problems, they're usually no big deal. Cars and trucks are complicated machines that are expected to be safe and reliable for years, through demanding conditions. Problems happen. As long as an automaker acts promptly to take care of the problem, it's not usually a cause for the automaker's investors to worry. 

But these new recalls bring the total number of recalls on Ford's new Escape to seven. That's a big number, even if nobody has been injured.

Ford's reputation for quality improved a great deal over the last few years. It has taken some hits in recent times because of frustrations with the MyFord Touch touch-screen system, but those haven't seemed to slow Ford's sales. But as Fool contributor John Rosevear explains in this short video, as the recalls pile up, Ford's recently improved reputation -- and its sales -- could start to come under pressure.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ford Motor Company Stock Quote
Ford Motor Company
$12.01 (3.89%) $0.45

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.