A Ford Motor plant
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General Motors and Ford Motor both announced vehicle recalls Friday. Investors appear nervous, as both shares are falling, but that’s probably an overreaction.
GM (ticker: GM) is recalling 681,509 GMC and Chevy SUVs, according to the National Highway Traffic Safety Administration, or NHTSA, website. The recall is for windshield wipers that may fail. Ford (F) is recalling 345,451 Escapes and Bronco for potential oil leaks.
GM and Ford shares appear to be down on the recall news. GM stock is off 1.8% in midday trading Friday, while Ford shares are down 2.3%. The S&P 500 and Dow Jones Industrial Average are both flat.
Recalls don’t always move stocks. Recalls are a normal part of automotive operations. The number of vehicles, more than 1 million combined, might be one reason for investor uneasiness. What’s more, the Ford Bronco is a popular new model from the auto maker.
Investors are also paying more attention to recalls these days. That might have something to do with the Friday reactions as well. Investors’ antennae are up mainly because of Tesla (TSLA), which has recalled about 1.5 million vehicles so far in 2022. Problems have included rolling stops allowed when driver assistance software was enabled, and for game-playing functionality on the center touch screen, which could be enabled when a Tesla vehicle was is in drive mode.
None of the recent Tesla recalls needed to be fixed with a shop visit. Tesla corrected the issue with an over-the-air software update, similar to fixing a bug in smartphone operating systems. Tesla simply pushes out the update.
Tesla stock is up 0.6% in Friday trading, and ended the first quarter with a gain of about 2%. GM and Ford stock dropped about 25% and 18%, respectively, in the first quarter of the year.
Write to Al Root at [email protected]
