Ford Motor Company (NYSE:F) shares are trading slightly higher on Thursday.
Today, the company has agreed to a consent order with the National Highway Traffic Safety Administration (NHTSA), including a civil penalty of $165 million for failing to meet federal recall requirements. This marks the second-largest civil penalty in NHTSA's history, following the Takata airbag scandal.
The penalty stems from Ford's delayed recalls of vehicles with defective rearview cameras and its failure to provide accurate and complete recall information, as required by the National Traffic and Motor Vehicle Safety Act.
"Timely and accurate recalls are critical to keeping everyone safe on our roads," NHTSA Deputy Administrator Sophie Shulman said.
According to Benzinga Pro, F stock has gained over 7% in the last year. Investors can gain exposure to the stock via First Trust Nasdaq Transportation ETF(NASDAQ:FTXR).
Also Read: Ford Recalls 422,000 Sports Utility Vehicles On Faulty Rearview Camera Image Display: Report
The settlement includes an upfront payment of $65 million, with an additional $55 million deferred and $45 million allocated for performance obligations.
As part of the consent order, Ford must take several actions to improve its recall processes and safety compliance. These include developing enhanced safety data analytics, creating a document interface platform for internal and NHTSA-initiated investigations, and building a multi-modal imaging test lab for low-voltage electronics.
Ford will also need to invest in a vehicle identification number-based traceability system to track components.
Additionally, Ford is required to review all recalls issued in the past three years and ensure they were properly scoped. The company must also improve its decision-making process for recall investigations, speed up recall decisions, and update its compliance policies.
NHTSA will oversee Ford's compliance with the consent order, which lasts for three years, with the possibility of extension. The two parties will meet quarterly to ensure ongoing improvements. NHTSA emphasized that timely and accurate recalls are crucial to ensuring the safety of all road users.
Price Action: F shares are trading higher by 0.99% to $11.21 at last check Thursday.
Photo: Courtesy of Satur via Shutterstock
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