Justice Department Investigating Ford over Fuel-Economy Testing
Analytical and coastdown tests are being probed; no defeat devices were involved.
The U.S. Department of Justice has opened a criminal investigation over the Ford Motor Company's emissions-certification processes. The probe "currently focuses" on Ford's road-load estimations, including analytical and coastdown procedures used to determine published Environmental Protection Agency (EPA) fuel-efficiency figures, and "does not involve the use of defeat devices," the automaker stated in its First Quarter 2019 financial report issued Thursday.
The investigation involves "overstated" fuel mileage on a "large number" of models, according to published reports. Fuel-efficiency numbers also directly affect emissions standards for cars and trucks sold in the U.S.
"We voluntarily disclosed this matter to the EPA and the California Air Resources Board [CARB] on February 18, 2019 and February 21, 2019, respectively," Ford states in the SEC 10-Q report. The Justice department subsequently "opened a criminal investigation into the matter. In addition, we have notified a number of other state and federal agencies. We are fully cooperating with all government agencies. Because this matter is still in the preliminary stages, we cannot predict the outcome, and we cannot provide assurance that it will not have a material adverse effect on us."
The automaker announced last February that it had begun its own internal investigation into its testing procedures, with assistance from an outside firm. The internal investigation centers on testing procedures for the 2019 Ford Ranger, which went on sale at the beginning of the year.
The EPA's listing for the 2019 Ford Ranger at fueleconomy.gov includes a curious third entry for a truck with only two variants that affect gas mileage. Both the rear- and the four-wheel-drive Ranger come with a 2.3-liter turbocharged I-4 engine and 10-speed automatic transmission, but there's a listing between the two headed, "2019 Ford Ranger Incomplete."
The "Ranger Incomplete" is rated for 19 mpg city, 18 mpg highway, and 18 mpg combined, which is below the 4WD's posted numbers of 20/24/22 mpg.
Volkswagen paid a $4.3 billion penalty to the Justice Department in 2017 after it was caught using defeat devices to overstate the fuel efficiency of its diesel-powered models. Fiat Chrysler paid an $800 million civil settlement to the Justice Department and State of California earlier this year after it was accused of overstating fuel efficiency of its diesel light-truck engines, and regulators currently are investigating Mercedes-Benz parent Daimler over similar issues.
Ford Motor Company reported first quarter automotive revenues of $37.2 billion, down from $39 billion in the first quarter of 2018. Net income was substantially lower than the previous year, at $1.1 billion versus $1.7 billion. Ford attributed the lower revenues to the cost of its massive reorganization.