Ford Fumbles First Hybrid SUV

While the recall of half-million Escape and Mazda Tribune SUVs does not effect Escape Hybrid, but the bad publicity can't help sales, thinks Wall Street gossipers

Published: 14-Dec-2004

They say that history repeats itself. What "they" don't tell you is that history isn't all that particular about for whom it repeats itself. Back in July, we took a look at the timing of Honda's (NYSE: HMC) decision to recall 1.1 million vehicles over a defect in their transmission shafts. At the time, Honda was gearing up to introduce its first full-size hybrid gas-electric sedan, the hybrid Accord (which finally began selling in the U.S. last week). Given that the plain vanilla Accord was one of the vehicle models being recalled, the bad publicity could hardly have come at a worse time.

So what's worse than having a PR fiasco break just before you begin to sell a new product, giving you just a few months to spin the story and fix the problems? That's right: It's having a PR fiasco break after you've already begun selling the new product, giving you no time to spin and no time to fix the problems.

On Friday, history gave not Honda but Ford (NYSE: F) a tap on the shoulder -- and, when that didn't get the automaker's attention, whacked Ford upside the head with a half-million unit recall of the company's Escape SUV and its Mazda Tribute twin. What's this have to do with Honda's recall back in July? Well, Ford's first effort to join the battle with its Japanese rivals in the market for hybrid vehicles began in September. Despite being slow out of the gate (Honda and Toyota (NYSE: TM) have been selling hybrid sedans for years), Ford made a clever marketing call by ensuring that it would at least be the first automaker to field a hybrid SUV. That should have been a coup for Ford -- except that the hybrid SUV in question is the Escape.

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