Ford Escape (and Ford Maverick and Mazda Tribute) recall

A possibly sticky gas pedal leading to acceleration problems has led Ford Motor Company to recall nearly 500,000 SUVs, both Escapes and Mavericks. The news on this recall takes us deeper into the auto industry than we normally go.

For example, the Christian Science Monitor reports that Mazda Tributes, made by Ford for Mazda (who knew?) are also being called in for repair. The problem seems to be linked to cruise control, which we must admit, we have never mastered, and so we never use it on our car – an 11-year old Nissan Altima. The CS Monitor says:

One way to reduce the hazard is avoid fully or almost-fully depressing the accelerator pedal, a Mazda spokesman advises in an e-mail. “Should drivers experience what they believe is a stuck throttle in this or any other vehicle, they should firmly and steadily apply the brakes without pumping the brake pedal, shift to neutral, steer the vehicle to a safe location, and shut the engine off after the vehicle is safely stopped.”

SUVs were the villains of the 1990s. Remember the headlines? “SUV kills three in highway crash.” Radio hosts, we particularly remember Rush Limbaugh’s humorous take on the entire cars-as-killers idea, delighted in pointing out that human drivers were operating the SUVs. Eventually the whole SUV-Killer meme disappeared.

But here we want to look at the complexity of the auto manufacturing industry. We’ve loved Ford (but own no stock in the company) ever since their CEO came right out and said to Congress, “Money? We don’t need your stinkin’ money!”

Surprisingly that bravery, or was it bravado?, did not bring down the liberal hammers on Ford’s head. Not sure what was going on there, since winners and success seem to bring out the worst in that crowd.

Instead, they simply didn’t dwell on Ford. Their goal was to get GM and Chrysler nationalized. In the end, only GM has had that honor and now is a mainstay auto maker in… wait for it… CHINA! Lots of other “American” cars are made in Mexico and elsewhere.

So, now, where do you go with the union-started “Buy American!” slogans? Lots of Japanese, Italian, and we don’t know whobody all else cars, are made in … America! The simple fact of the matter is that manufacturers will go wherever the economics and politics will let them go.

We have a whole war on factory locations going on right here in the U.S. The lightly-unionized Southern states are outbidding the heavily-unionized Northern and Midwestern states for new factories and the unions are whining to Big-Daddy-Federal-Government to “make them stop!” (relocating anywhere).

Investment lesson: get to know your industry before you invest in it.


About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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