Ford Motor Co. said it will take a $295 million hit to its first-quarter earnings from two recalls in North America announced Wednesday, one involving engines that could catch fire and the other involving a persistent door latch problem. Ford CFO Bob Shanks last week alluded to a higher-than-expected warranty cost that will impact Ford’s first quarter earnings. In a file with the Securities and Commission, Ford said the $295 million charge would be absorbed mainly by its North America and Europe business units and would be included in first-quarter results.
Ford is calling back 230,000 2014 model year Escapes, 2014-15 Fiesta STs, 2013-14 Fusions and 2013-15 Transit Connects equipped with 1.6-liter GTDI engines. Ford said a lack of coolant circulation can cause the engines to overheat, cracking the cylinder head. That could result in an oil leak that could ignite a fire. Ford said it’s aware of 29 reports of fires in the U.S. and Canada; no injuries have been reported. Ford currently doesn’t have service kits available and told customers to continue to drive their vehicles.
The company advised customers to seek a dealer if their vehicle leaks coolant. It will mail customers instructions on how to check and refill coolant. About 208,584 of the affected vehicles are in the U.S. and federalized territories, 21,854 are in Canada and 318 are in Mexico