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Ford’s recall problem, soaring used car sales, Tesla's big ask
Hey everyone,
Welcome to another edition of the Car Dealership Guy daily round-up. Today, we’re taking a closer look at Ford’s ongoing recall woes.
Further down, you will find the latest used car sales data from March and a preview of what’s at stake for Tesla ahead of their upcoming shareholder meeting in June.
1. Recall alert: Ford Bronco Sports and Mavericks
Top line: Ford dealers are about to get very busy.
Over the past 24 hours, Ford has recalled over 499,217 compact SUVs and pickup trucks.
Recall #1: Ford has issued a recall for 42,652 Escape and Bronco Sport models equipped with the base 1.5-liter three-cylinder engine, according to the National Highway Traffic Safety Administration (NHTSA).
The recall affects the 2022 Escape and the 2022–2023 Bronco Sport. The issue involves a potential for the fuel injector to crack. This could lead to fuel or fuel vapor leakage. In some cases, this leakage could ignite a fire in the engine bay.
Recall #2: Ford is recalling 456,565 Bronco Sport SUVs (2022-2024 and Maverick compact pickup trucks (2022-2023) due to potential loss of drive power caused by a low battery issue.
Of note: Ford was the most recalled in 2023, and it continued to outpace other automakers in Q1, according to a recent analysis from BizzyCar.
Why it matters: Ford has lost billions to recalls over the past few years, and it’s something that keeps CEO Jim Farley up at night.
But according to a report from Automotive News, the automaker is working on addressing “inefficiencies” in its production and “dysfunctionality” within the company.
One way Ford is working to fix quality issues, Farley said, is by tying employee bonuses to improved scores. When he became CEO, he noticed a vast majority of managers received full bonuses even after the company led the industry in recalls — a U.S. record Ford has held now for three consecutive years. He quickly changed that.
“You have to set up a culture shift — a performance reward system where every engineering manager, purchasing component manager and plant manager is fully accountable for the quality and cost of their work,” he said.
Looking ahead: As Ford rolls out these major recalls, both its reputation and finances are on the line.
2. Used vehicle sales soar in March
Big picture: Demand for used vehicles was hot last month. According to vAuto Live Market View data estimates from Cox Automotive, retail used car sales in March rose from February by 18.5% to 1.66 million units — the highest volume in two years.
What it means: Tax refund season was in full swing in March. Car buyers had extra cash to put down for their vehicle purchase in an effort to get their monthly payments as low as possible.
But there’s more: Rising new vehicle inventories are pushing used car prices down.
Even all-time high interest rates on used vehicles don’t seem to be deterring buyers.
Bottom line: Affordability continues to be the highest priority for consumers in this economic climate.
3. Tesla's big ask: Musk's $55B pay and Texas move
Driving the news: Tesla is seeking a shareholder vote of approval to reinstate a $55 billion pay package for CEO Elon Musk that was previously nixed by a Delaware judge.
The EV maker is also looking to relocate its corporate registration from Delaware to Texas. These issues will be up for a vote at Tesla's June 13 annual meeting, reports the Associated Press.
Why it matters: Previously, Chancellor Kathaleen St. Jude McCormick had ruled that Musk's pay package was improperly influenced by him, raising concerns about governance and executive compensation.
Zooming out: Tesla is also considering relocating to Texas, which would align with Musk's personal move and the company’s operational changes.
By the numbers: Tesla's recent filings show a 9% decline in vehicle deliveries in Q1 year-over-year. In response, Tesla has cut vehicle prices dramatically, by as much as $20,000 on some models, affecting profit margins and resale values.
Meanwhile: Tesla announced mass layoffs to its workforce by about 10%, which equates to roughly 14,000 jobs, as part of its strategy to manage the downturn.
Does Elon deserve a $55 billion compensation plan? |
We’ve got tons of great jobs hitting the CDG Job Board right now. Here are some standouts for anyone looking for their next move.
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Looking to hire? Add your roles today—it’s 100% free.
That’s all for now.
Thanks for stopping by and hope to see you again tomorrow. — CDG
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