Not long ago, we heard about legacy automaker Ford (F) and the issues it was having with its backup cameras. But now, those problems got a whole lot worse because the government got involved. Like a nine-figure fine level of “got involved.” Shareholders were less than happy to be on this latest hook, and Ford shares were down fractionally in Thursday afternoon’s trading.
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Ford will pay out as much as $165 million, according to the Associated Press, for “…moving too slowly on a recall and failing to give accurate recall information.” This is actually the second-largest fine in the history of the National Highway Traffic Safety Administration, the report noted, with only the Takara airbag incident drawing a larger fine.
Of that $165 million, $65 million will be an outright payment to the government, with $45 million needed to spend in order to “comply with the law.” The remaining $55 million, meanwhile, is to be “deferred.” Further, Ford is now saddled with “an independent third party” that will be watching for Ford’s “recall performance obligations” for the next three years.
Scorched Hybrid and EV Lessons
Ford’s green aspirations also proved a bit of a mixed bag, as out in Canton, Michigan, a newly-purchased F-150 hybrid caught fire, leaving the truck mostly just a charred frame. The owner reported to Fox 2 Detroit that the incident has left him shaken up, and unable to buy another hybrid pickup.
Meanwhile, Ford Pro—which was one of the high points from Ford’s latest earnings report—is making some key discoveries about the electric vehicle concept, and is working to improve things accordingly. For instance, its new EV-Switch Assist tool will offer valuable information for fleet operators, letting them know where some routes are better suited to switch to electrification.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on five Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 13.58% rally in its share price over the past year, the average F price target of $11.75 per share implies 5.71% upside potential.
