Ford's New Business Model Now Features 300,000 Brake Failures and An $800 Tariff Punch (Ouch)

F.O.R.D. (Found On Road Dead)... 

Pour one out for Ford shareholders, because they’re having one helluva bad break. In case you missed it, Ford just recalled over 300,000 vehicles because the software controlling the electric brake boosters might decide to take a break… while you’re driving. The recall affects 2025 models of the F-150, Ranger, Bronco, Expedition, and Lincoln Navigator… whereas, if the power brake assist fails, your stopping distance grows. Translation: At highway speed, that’s the difference between a normal slowdown and rear-ending someone into the next ZIP code.

(Source: Giphy) 

The worse part is that this isn’t a one-off for Ford. It’s the third major recall in under two months. In July, Ford yanked nearly 700,000 vehicles off the road due to a fuel leak that could start a fire. A few weeks earlier, they pulled back another 850,000 over a low-pressure fuel pump issue. Ooof. Ford has led the nation in vehicle recalls for three straight years. Leadership says that’s going to change because they’re now holding new vehicles for “extra” quality checks. Which, if it works, begs the question: what exactly were they doing before?... LOL 

(Source: Fast Company) 

And yet, the braking system isn’t the only thing failing to deliver. Ford just posted its first quarterly loss in two years… a $36 million slap, driven by an $800 million tariff hit and write-downs tied to killing off yet another EV project. Revenue was up 5% to $50.2 billion, but that’s not what investors are watching. They’re watching profits, and they’re watching margins. Both went backwards. 

Now, Ford expects tariffs to cost it $2 billion this year, mostly from aluminum and steel… despite producing most of its vehicles in the U.S. They’ve pleaded their case to the White House, pointing out that they’re the “most American” automaker on paper. But leave it to Daddy Donnie Politics who responded with a 25% tariff on imported autos and parts anyway, followed by a 15% adjustment with the EU.

(Source: The Hill) 

So what does an automaker who can’t get it’s sh*t together to do? Jack up prices… especially on models built in Mexico and hope Pancho (read: consumers) doesn’t notice. However, that only works until the economy slows, or until the labor market gets shakier, or until people decide they don’t want to pay 60k for a truck that might forget how to stop.

Regardless, the broader issue is that Ford is simultaneously cutting headcount, canceling future EVs, and bleeding from every part of the production chain. They ended the quarter with $28.4 billion in cash and $46.6 billion in liquidity, which sounds good until you realize how fast they’re burning through it while trying to be everything at once… legacy automaker, EV pioneer, and now, software company with over-the-air updates that are supposed to fix your brakes.

(Source: Imgflip)

At some point, the market stops rewarding narratives and starts punishing results. Ford's recall count isn't a rounding error anymore. It’s the business model. And they are getting cooked for it. Of course, things could change, but the writing is on the wall write now… and investors are taking notice with shares being down -8.38% MTD. So yeah, for now, keep your eyes on this story and place your bets accordingly. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Ford as mentioned in the article.