That Ford Airbag Recall Is Gonna Be Crazy Expensive At $500 Million

More bad news from Ford today: their recall of 850,000 cars and SUVs for an airbag defect is anticipated to cost them about $500 million. Suddenly, potential profits for the year aren't looking so hot.


The automaker announced Friday that they have to recall hundreds of thousands of late model Escapes, Fusions, MKZs, C-Maxes and other vehicles because their restraints control module may experience a short circuit. If that happens, airbags and seat pretensioners may not deploy in the event of a crash.

It's big deal affecting a ton of cars, and a lot of newer cars that are critical to Ford's sales numbers. And it's just the latest round of gigantic safety-related recalls that have plagued automakers of every variety in 2014.

Today, Ford of the Americas president Joseph Hinrichs said that they will have to spend about half a billion dollars to fix this problem. As USA Today reported, Hinrichs said this likely means Ford will be "on the lower end" of the 7 percent to 9 percent profit margin range it gave to analysts earlier.

And as David Shepardson of the Detroit News pointed out on Twitter earlier, today was not a good day to be a Ford shareholder.


Recalls are expensive, you guys.

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