updated 8/3/2006 2:41:58 PM ET 2006-08-03T18:41:58

Ford Motor Co., already reeling from business setbacks, recalled 1.2 million trucks, sport utility vehicles and vans Thursday amid concerns about potential engine fires.

Ford said the recall was tied to the speed control deactivation switch system, which could corrode over time, overheat and ignite. It builds upon one of the largest recalls in U.S. history.

The recall was the latest setback for the No. 2 U.S. automaker, which said late Wednesday that its second-quarter loss more than doubled from what it previously reported because of higher-than-expected pension costs.

Ford also said that its luxury division will not be profitable this year. And Ford hired a turnaround specialist amid a report that the automaker is reviewing poorly performing units, including Jaguar, with an eye toward the possible sale of some operations.

Underscoring the woes in North America, Ford last month for the first time sold fewer vehicles than Toyota Motor Corp. in the United States.

The recall involves vehicles fueled by gasoline or natural gas and equipped with speed control, including the 1994-2002 F-250, F-350, F-450 and F-550 F-Super Duty trucks, 2000-2002 Excursion SUVs, 1994-1996 Econoline vans and 1996-2002 E-450 vans, and 1998 Explorers and Mountaineers. The recall does not involve similar vehicles fueled by diesel.

Last September, Ford recalled 3.8 million pickups and SUVs from the 1994-2002 model years, including the top-selling F-150 pickup, because of the concerns over engine fires. It was the fifth-largest auto industry recall in U.S. history.

In January 2005, the company recalled nearly 800,000 pickups and SUVs from the 2000 model year because of similar issues.

The National Highway Traffic Safety Administration said Thursday it closed a nearly two-year investigation into the cause of the fires. The agency has received 1,472 complaints connected to the problems, including 65 reports of fires.

NHTSA said there have been no confirmed deaths or injuries, but lawsuits have been filed over three deaths in Iowa, Georgia and Arkansas, allegedly connected to vehicle fires.

Ford said last year its review found that brake fluid could leak through the cruise control’s deactivation switch into the system’s electrical components, leading to corrosion. That could lead to a buildup of electrical current that could cause overheating and a fire.

Dealers installed a fused wiring harness to the cruise control deactivation switch to prevent the risk of fire if the switch leaked.

NHTSA spokesman Rae Tyson said that agency investigators, working with Ford, found the switch overheated in vehicles where the switch was placed in an upright position or at an angle and where there was excessive vacuum pressure in the brake system.

He called it “one of the most exhaustive investigations that we’ve ever done.”

Tyson said he did not expect any additional recalls. About 20 million of the switches are used in vehicles, but Tyson said similar problems have not been found in non-Ford vehicles.

“We believe that we have identified the problem vehicles and we believe the Ford recall today is going to address the remaining problem,” he said.

In a letter to NHTSA, Ford said that through April, it had identified about 250 incidents alleging fire or smoke tied to the switch in the affected vehicles, with about 60 related to smoke. The company said there have been no allegations of serious injuries or fatalities.

Ford spokeswoman Kristen Kinley said about 40 percent of the vehicles under the previous recalls have been fixed.

Owners of the newly recalled vehicles will receive notices in the mail in a week and dealers will install a fused wiring harness. Customers can contact Ford at 1-888-222-2751.

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