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Ford, Toyota recalling 5 million vehicles

Cruise-control, steering woes seen in trucks, SUVs

WASHINGTON — It hasn't been the best of years for Ford Motor Co.

Already dealing with a profit slump, intense competition and mounting health care costs, the nation's No. 2 automaker now has a new headache: Getting people to bring back 3.8 million trucks and SUVs in the fifth largest recall in U.S. history.

Ford issued the massive recall on Wednesday, responding to hundreds of complaints of engine fires from owners of vehicles from the 1994-2002 model years, including the top-selling F-150 pickup.

Toyota Motor Corp., meanwhile, recalled 978,000 sport utility vehicles and pickup trucks over problems with the power-steering system. A rod linking the steering wheel and the wheels could fracture, the company said, when the steering wheel is turned while the vehicle is stopped. The affected vehicles include the 1990-95 4Runner SUV, 1989-95 truck 4WD and 1993-98 T-100 pickup.

In the Ford case, the National Highway Traffic Safety Administration and the automaker have been investigating complaints of engine fires linked to the cruise control switch system.

NHTSA said Wednesday it was reviewing 1,170 allegations of engine fires related to the vehicles and would continue a probe launched earlier this year. Three deaths connected to the fires have been cited in news reports and lawsuits in Iowa, Georgia and Arkansas.

Ford's recall includes the 1994-2002 F-150, 1997-2002 Ford Expedition, 1998-2002 Lincoln Navigator and 1994-96 Ford Bronco equipped with factory-installed speed control. It covers most of the vehicles being evaluated by NHTSA.

Companies rarely disclose the cost of a recall, but it will cost millions of dollars during a difficult period for Ford. Second-quarter profits were down 19 percent to $900 million, hurt by increasing competition and high labor and health care costs and Ford plans to lay off at least 2,750 salaried workers in North America by the end of the year.

"This issue has been kind've bubbling up with the fires . . . so they needed to do something quickly. They certainly didn't want another Firestone tire issue on their hands," said Rebecca Lindland, an analyst for research firm Global Insight, based in Lexington, Mass.

The recall also strikes at the quality of the F-Series truck, the best-selling full-size pickup for nearly three decades. In July, when the company offered its employee discount to all buyers, the F-series set a record for the highest monthly sales of any vehicle since the 1920s with total sales of 126,905 trucks.

Ford said its inquiry found that brake fluid could leak through the cruise control's deactivation switch into the system's electrical components, leading to potential corrosion. That could lead to a buildup of electrical current which could cause overheating and a fire.

Owners will be notified by mail immediately. Dealers will install a fused wiring harness to act as a circuit breaker in the system. The company said the harness would cut off electrical current to the switch if the current increases.

In January, Ford recalled nearly 800,000 vehicles from the 2000 model year because of concerns over engine fires.

"We have a solution that fixes the problem and we're confident that this is going to be the right remedy," said Ford spokeswoman Kristen Kinley.

Texas Instruments Inc. supplied the switch in all of the models. TI spokeswoman Gail Chandler noted that the switch was one part of the system and said the company "continues to have confidence in the safe design of the switch itself."

Former presidential candidate Ralph Nader, a longtime auto safety advocate, said the recall was insufficient, citing similar switches found on 16 million Ford vehicles.

"Ford Motor Company's sluggish and piecemeal approach to its automotive responsibilities betrays motorists' safety," Nader said.

Toyota said its recall would begin in mid-September and was based on seven confirmed cases of the power-steering problem in T100 vehicles. No crashes have been tied to the issue.

Toyota's profits were down 7 percent to $2.4 billion in the April-June period but the company is generally healthier than its U.S. rivals.

Toyota's U.S. sales were up 11.4 percent in the first eight months of this year, compared with an average increase of 3.5 percent for the Big Three. Car sales made up most of that increase. Sales of light trucks — including the 4Runner — were up only 2 percent.

Jim Sanfilippo, a senior industry analyst with Bloomfield Hills, Mich.-based Automotive Marketing Consultants Inc., said the Toyota recall was a major one considering the company sells only a fraction of the pickups and SUVs sold by Ford.

"Will this put a dent in Toyota? It makes them seem human," Sanfilippo said.

Ford shares rose 17 cents to close at $10.13 Wednesday on the New York Stock Exchange. Toyota shares fell 7 cents to close at $83.78 on the New York Stock Exchange.