Ford Motor Company (NYSE: F) stock plunged 13.8% this week, according to data provided by S&P Global Market Intelligence. That may not come as too much of a surprise, considering oil prices rose by the largest weekly amount in futures trading history.
The 35% jump in U.S. oil prices sent the stocks of automakers, cruise line operators, and airlines plunging. But there was also a company-specific reason that Ford stock dropped as much as it did.
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Ford announced vehicle recalls this week totaling nearly 2.4 million vehicles. The recalls are primarily associated with failures in rearview cameras and windshield wiper problems, according to the National Highway Traffic Safety Administration.
That adds to the news last month that Ford recalled 4.3 million vehicles for safety issues involving towing-trailer lights and brakes. That can be fixed with an over-the-air software update, but it still impacts Ford’s margins and reputation.
In 2022, the company brought on board a “quality czar” to lead enhancement initiatives. Jim Baumbick was chosen for this position to supervise the company’s efforts to improve vehicle quality and resolve quality-related challenges. However, despite CEO Jim Farley’s promotion of quality improvements, problems continue to persist.
The rash of recalls only exacerbated investor selling in a week driven by uncertainty over conflict in the Middle East and concerns about how high oil prices may go.
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