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Auto News: Auto Recalls a Big Deal for Investors?

by Hagens Berman


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When Are Auto Recalls a Big Deal for Investors?

Some recalls are no big deal, but some can have big consequences for stocks. Here's how to tell the difference.

Ford Motor Company said on Friday that it will recall about 347,000 2018 model-year pickups and SUVs to fix a transmission problem that could cause the vehicle to roll away when the transmission is in park.

That sounds like a big deal, doesn't it? If you own one of the affected vehicles, it is a big deal -- in the sense that you'd best get it fixed. (It won't cost you anything except some time.)

But for investors in automakers, not every recall is a big deal. Some are very important because they can have a significant impact on the company's bottom line or stock price. But many aren't -- even if the defect sounds serious, it may be no big deal in terms of its impact.

How do you tell the difference? read more »