Ford expands recall to more than 1.4 million F-150s

By John Crawley and Bernie Woodall

WASHINGTON/DETROIT (Reuters) - Ford Motor Co <F.N> reluctantly agreed on Thursday to greatly expand a recall of its F-150 pickup, the best-selling vehicle in North America, on concerns that some air bags could unexpectedly deploy.

Ford shares closed 1.1 percent lower as the recall grew steeply to some 1.47 million vehicles, mainly in the United States. It represented an unusual high-profile setback for a company that has experienced a revival in sales, reputation and Wall Street regard at a time when leading U.S. and domestic rivals wrestled with financial and safety troubles.

After months of difficult negotiations with regulators at the National Highway Traffic Safety Administration (NHTSA), the automaker agreed to recall nearly 1.2 million pickups in the United States, on top of 144,000 recalled in February.

The action also included 89,000 F-150 pickups in Canada and 46,000 in Mexico. Another 10,000 were recalled in other parts of the world, Ford said. The recall also affects 16,000 model year 2006 Lincoln Mark LT trucks.

Barclays Capital estimated in a research note the recall of 2004-06 model year trucks would cost Ford $180 million, or 4 cents per share. Ford may have accrued some expenses already, Barclays said.

Ford has been widely praised in recent years by government officials for strong management, a lineup of more fuel-efficient new cars and trucks and an ability to restructure without bailouts, unlike U.S. rivals General Motors Co <GM.N> and Chrysler.

NHTSA, which has grown more aggressive with the industry following criticism it initially was too lax with Toyota Motor Corp <TM.N><7203.T> over claims of runaway acceleration last year, asked Ford in January to take more steps to address questions about the airbags.

Negotiations intensified in recent weeks before the automaker agreed to stronger action, government officials said.

In a terse statement, Ford held to its earlier conclusion the issue did not pose an "unreasonable risk." But it agreed to expand the recall "to reassure customers of Ford's commitment to safety and to eliminate any possible customer confusion."

NHTSA Administrator David Strickland said in a statement that regulators were pleased with the outcome and that Ford was "taking action to protect consumers."

Agency records show NHTSA received more than 200 complaints from motorists of sudden air bag deployment, causing more than 60 injuries.

Ford said separately it knew of no accidents related to the issue believed to be triggered by an electrical problem. Ford said field data shows drivers were able to keep control of their vehicles if the air bags deployed unexpectedly.

TrueCar analyst Jesse Toprak does not see a meaningful negative impact on Ford unless there is more bad news, which is not expected.

"The pickup truck market is already going to be recovering this year despite high gas prices. Ford has the resources to weather this without a major effect on sales," Toprak said.

The F-150 is the primary model of the F-series pickup trucks, the best-selling truck in North America for the past 34 years, and the best-selling vehicle in the region for the past 29 years. Pickup trucks and SUVs generally create more profit for automakers than do smaller cars.

Ford said it would begin notifying vehicle owners in May to bring F-150s or Lincolns to dealers for repair at no cost. Repairs will take less than half a day, Ford said. Owners are asked to respond immediately if their airbag warning light is illuminated. If the light is ignored, in some circumstances, the driver's side front airbag could deploy unexpectedly.

NHTSA is investigating other safety complaints in Ford vehicles. This week, it expanded its investigation of motorist complaints that certain Explorer and Mercury Mountaineer trucks rolled away while with the gear shift was in park.

Ford shares fell 17 cents to close at $14.81 on the New York Stock Exchange, compared with a 0.1 percent rise in the S&P 500 index. <.SPX>

(Reporting by John Crawley in Washington and Bernie Woodall in Detroit; editing by Gerald E. McCormick, Matthew Lewis and Andre Grenon)